Doom and Gloom for Web Radio

DailyTech posted interviews with the founder of Pandora and management from Proton Radio (and Proton Music) asking them what SoundExchange's latest rulings mean to them. A lot of net radio stations are dreading the upcoming changes in royalty rates, which are said to be around 400%... a number that would bankrupt most of the industry. An interesting read for anyone who uses online radio.

What about Canada..

what are the royalty rates like up there?

Meh...

Do a lot of people actually listen to streaming audio from Web radio stations? I would think I'm more likely to hear what I want by listening to my own mp3 collection, than by relying on someone else's idea of the perfect mix.

I'm sure the DJs do a good job of coming up with a mix of songs that work out for most people -- but for any given individual, I would think the best mix would always be one they chose themselves.

I mean, what Web radio station is going to play Weird Al, Jimmy Buffett, Francis Cabrel, Jim Croce, John Denver, Deuter, Enya, ELO, Jean-Jacques Goldman, Buddy Holly, Brannan Lane, Willie Nelson, Peter Paul and Mary, Tom Paxton, Trevor Pinnock, Pachelbel, Pandora, Queen, Starship, Tchaikovsky, etc -- all without playing any of the many (very popular) artists whose works just don't happen to work for me?

Yeah, I have very weird musical taste -- I admit it. ...But don't we all?

SOMA FM

I have been listening to SOMA and Bartok radio for years. It's wonderful stuff and a lot better than whats on broadcast radio. It all flows together and they get new stuff inserted in there, too.

It's a lot better than listening to all my stuff I know by heart and just hitting 'shuffle'.

Re:Meh...

In terms of choosing tracks you like, you have a strong argument.

However, if your approach to life is that predictable gets boring, or you like the idea of hearing things you've never heard before, then you can see how the "best mix" for some of us cannot be comprised only of artists we already know.

But there's also the question of what you're in the mood for. I like having the choice of radio vs. my own collection. If I'm in the mood for my own selection, I've got it. If I want to hear new stuff, there's the radio. And with both a wide selection of stations and services using predictive algorithms to select tracks I might like, I have a lot of control over the degree of randomness in the mix of music I get from the radio.

It's that mix of my music vs. radio that's the important thing for me - I confess it's a small part of my listening time is to internet radio. But a small percentage across millions of potential audience members is enough to justify the internet radio stations. Unless royalties are raised so high it puts them out of business.

The point of most markets (and commercial arrangements) is to find a price suitable to both parties. Pricing internet stations out of the game, when they could otherwise provide a useful service to a niche market, is an abuse of power. It's a bad thing.

Re:Meh...

The problem with just playing your own mp3 list is that you're not exposed to anything new. I'm not a big fan of DJ'd web music for the very reasons you list. I prefer Pandora, which basically takes the Songs/Artists you like, deconstructs them according to their fundamental nature (like dynamic male vocalist, major key tonality, rhythm guitar, etc) and then using some complex math finds other types of music based on those properties. You then fine tune it using a like/dislike button. It actually works very well and I've found some new music that I really like. Plus I don't find myself fast-forwarding through songs like I do on Yahoo's music service.

Re:Meh...

The thing is where did you get that music and hear it in the first place?

A lot of these radiostations, offer more than just music, but also commentary and talk. I've heard a lot of artists for the first time on net radio. Some of the songs I've heard over the net are tapes and recordings where the only copy exists at the station itself or are from local artists who don't have big record deals.

Every artist listed in the above post is main stream.

How about Becket and Frenz, Kraftwerk, or atomisk? How about traditional German, African, or any other ethnic music that isn't run through the pop-radio filter?

What is being taken out here are the artists, music and sounds that DON'T often have a record label or that you probably haven't heard of. Good stuff, that deserves to be aired. Granted perhaps most of it doesn't fit the tastes of enough people for it to belong on a major channel, but that doesn't mean it isn't good enough to be played and shared over the radio, either through the spectrum or the wires.

This is an important issue, and if net radio goes down, even if you don't listen. Just wait till they get around to your corner of the net.

Web Radio and new music

Web Radio has been a great vehicle for me to discover new music. I have bought a lot more music lately because of discovering new artists which I heard through Web Radio. I Don't know why the industry is hell-bent on destroying a good thing for both the music industry and the consumer. I just don't get it! I'm mad and frustrated...

offshore it!

I'd like to see Webcasters move to jurisdictions that sound exchange cannot touch and end this BS once and for all. Russia comes to mind.

Everyone sing with me:

Royalties kill the internet radio star....

begs the question

What do nerd libertarians that listen to internet radio think about this?

Only a matter of time

Doom has been ported to everything in existence, so it was only a matter of time before it became playable on Web Radio. It will be interesting to see Gloom running though, since I don't have much reason to bring one of my Amiga 1200s down from the attic these days to play it.

It's the big media conglomerates, silly....

Isn't the assault on internet radio really being perpetrated by the media overlords like Infinity and Clear Channel who own US politicians and see any encroachment into their space as competition?

Re:It's the big media conglomerates, silly....

Actually, it's the RIAA labels doing it. SoundExchange charges royalties on behalf of RIAA members and others- it is
the creation of RIAA, in reality. Now, think about it... They largely have control over the media markets through
the means and connections they already have with Radio- but don't have any positive control over anything in the
case of web radio. Very probably never will because the bar to entry is very shallow. Sure it kind of scares the
ClearChannel's of the world, but in the end, it's just another format for them to step into. In the end, they can
compete decently well in that space- but there's still no way to control you or I stepping up to the plate and putting
out stuff that's got NOTHING to do with the labels. Classical. Renaissance. Celtic. And, so forth.

RIAA's members and RIAA themselves do not like that thought at all.

They exist right at the moment to strip mine what we call culture right at the moment. In order for them to maximize
profits (and make the Daytraders happy...) they need to have nearly absolute control on what comes out as usable
music, etc. so that they can extract every dollar they can out of us. Well, so long as people don't realize they're
getting short-changed by these jokers.

Web Radio was helping people find music that the big media conglomerates (You had it right- just the wrong conglomerates)
like Sony BMG, Warner, etc. just have no interest in backing and producing content for- EVER. They don't want that.
Which is why we're here now, discussing this.

The players involved with the compulsory licensing should not be involved in setting the pricing, etc.

Someone that doesn't ever touch content covered by the licensing should not have to pay for it- if they've
got deals with all the performers that are being given "airtime" online, they shouldn't have to pay and if
they break the rules, then they should pay a dear price for that act of infringement.

But, that's not what is going on, now is it?

Jimendo

I'll stick with Jimendo.com for my online music, thank you very much.

Pandora

I really hope Pandora isn't affected by this.

Its the only internet radio station I listen to, because it offers up music I haven't heard before but is based on my previous preferences. I'm worried my taste will stagnate without it.

Common new-business problem

There is certainly a market for "Internet radio" in some form. It just isn't a market that pays anything meaningful yet.

This leaves the content owners in somewhat of a quandry. They can allow "Internet radio" (whatever that means) to skate by without paying anything and try to convince the rest of their market that the music is worth paying for, or they can pretty much say "everybody pays!" Obviously, "everybody pays!" is more lucrative but it also doesn't start the worrying notion that the music is worthless. There are enough sources for that idea today as it is.

By forcing everyone to pay they may indeed be shutting the door on a possible future paying market. But they may also be preserving the current source of their revenue. I don't think the music industry is ready to go to an ad-supported business model, and I don't think you want to hear ads for Pepsi at the end (or in the middle!) of every song.

I've Stopped LIstening To Internet Radio Anyway

The only internet radio I listen to these days is BBC radio [bbc.co.uk], you can't beat it for quality programming and no ad's, that's unlikely to get affected by any internet radio royalty ruling because (a) it's main listener base uses old fashioned radio wave technology and (b) it's in the UK where licensing clearly controlled by some more enlightened individuals. There is another place to go if you want more control over your listening - imeem.com [imeem.com] is kinda like youtube for music - people upload music and then you can listen to music. Imeem does some mojo to figure out who the artists are and pays them a cut of the ad revenue, but if the artist has said no then all you can hear is a 30 second clip of the tune. The most astonishing thing is that somehow they've managed to convince one of the major labels - Warners - to sign on, this means that artists like Metallica and Madonna who used to sue site like napster are now supporting 'free' sharing of music. Sure there are a lot of artists still blocking their music, but there's so much in the way of fully licensed music that it's hard to run out of things to listen to. In a way it's like napster was, but with instant gratification and with the warm fuzzy feeling that the artists are getting compensated every time you listen. Forget most internet radio, much of it remains at the same production values as a winamp playlist in shuffle mode, I left that behind as soon as imeem turned up.

Sad time...

It's a very sad time for internet radio right now. It's always a shame how rules, regulations, and laws can ruin such a convenient piece of technology.

I kinda hope internet radio dies

Because I think the time has come to call the RIAA's bluff and simply refuse to kowtow to their extortion. Maybe Jay-Z will have to sell one of his solid gold Bentleys to pay for the crack rehab for his pit bulls.

Everyone knows its a flush out by those with .....

....lots of money and kick back ties to the music industry....

The Kickbacks in the music industry have been uncovered before and laws passed to make such illegal.
So its now going on at a higher level of abstraction and harder to prove. Fewer involved at the proof point.

With todays technology there is no reason for middle men to exist to plunder the process of paying the artist.

What is lacking is the exchange system to make it all work without plundering.

Seems to me that the labels should be a service the artist go to and pay for, rather than the other way around in a contract distorted manner. And with this it means all proceeds of sales goes to the artists. This way the artist are in control and the labels become competitive in service they provide to the artists.

All artist start small and work their way up and on the way might find investors outside of the label service which should be prohibited from doing so. Where the label service may then be more motivated to protect the artists from abusive investors..

The point is that there is apparently a serious lack of checks and balances, that such lack of allows for abuses and kickbacks that bias what choice of music the rest of us get to hear and know about.

Things change!

Record Club of America changed the way record clubs worked.

The internet technology has changed the way Real estate is done (in the process uncovered abuse techniques and resistance to improvement).

Isn't it time to change the way the music industry works so to genuinely reflect what the consumers are interested in?

Net radio is free advertising!

I have purchased dozens of songs from iTunes because.... ...I heard them on net radio.

WHY THE FUCK is the industry trying to kill something that is MAKING THEM MONEY!? I don't understand these morons! Internet radio is like FREE ADVERTISING. It has introduced me to songs I've NEVER HEARD BEFORE, and ended up enjoying enough to purchase legally!

Are these people morons? I know the answer is obviously yes, but damn! Why are such idiots in control of such valuable intellectual property? Radio play can MAKE or BREAK a song.

And the funniest part? A lot of songs that net radio introduces to people may be older, more obscure back catalog stuff. Stuff that costs the record companies $0 to produce, because it's ALREADY PRODUCED. It's like FREE MONEY.

*grumble* I'm just exasperated at how STUPID record company execs are sometimes. They can make their millions without being total ASSHOLES, but they chose to be assholes anyway.

hmmm

It sounds as if the record industry is upping the rates for people they know they can get it out of. I would draw a parallel between this and colleges upping tuition to current students.

Last night I read an interesting article [nytimes.com] in the New York Times that centered around Producing Guru Rick Reuben: for whom I have tremendous respect. In amongst the 10 pages typed is what he deems to be an effective model to bring the recording industry back: charge everyone a subscription fee.

I'm not too fond of a model where the user only owns a subscription and the record companies have 100% control over the content. But Reuben is right, if only in principal. The only way the recording industry can sustain itself over the long term is to change its way of doing business.

Nerds Don't Care

Whenever this "land grab" by copyright owners and corporate mass media is reported, on Slashdot or anywhere else, no one cares to even discuss it. Slashdotters will get all up in arms over DRM and other copyright abuse, but directly extorting independent content publishers into extinction doesn't even generate a yawn.

Then the nerds complain when the "free stuff" disappears.

Why bother with a lot of stories and discussions of why the corporations act like they own all our content and media, when we ignore them whenever they grab it?

It's all about the DRM folks

Once you understand that, everything SoundExchange is doing makes sense. These seemingly counter-productive actions by SoundExchange lead to a lot of head scratching by a lot of people. Why would the music industry want to kill such a seemingly obvious way to generate more music sales? Etc.

The RIAA has been trying for years, without success, to pass legislation to require all internet radio broadcasters to use DRM in their streams. In practice this means only one thing: they desperately want to make it illegal to broadcast internet radio in mp3 format.

The RIAA has got in their heads that the combination of DRM-free readio broadcasts in mp3 format with tools such as StreamRipper is leading to rampant music piracy. I have no idea how rampant the piracy actually is, but it could be bad at least in theory. The problem is that it is possible, with relatively little technical know how, to point a tool like StreamRipper at, just for example, one of the many fine music 128k music channels available at somafm.com, leave it running, and come back a day or 2 later to a directory containing gigabytes of free MP3 music.

Anyway, since they have not been able to make mp3 broadcasting illegal, SoundExchange's behavior is simply the RIAA attacking the "problem" from a new front. They want to shut web broadcasters down. They know the new rates are way too high! That's the whole point. They want to bankrupt all the broadcasters who are streaming near-CD-quality mp3s out to the world for free.

My question

Why not switch to a non-RIAA music format. Sign local indie bands only. Anyone with a big business contract is SOL

Whoa! Whoa! Wait up

We get free music and now DOOM AS WELL?! Woah! Shooting up robots to some awesome techno and rock...What's gloomy about that?

Re:Non-label content

I apologize if this is a dumb question but does this whole shitstorm impact Internet radio stations that play only completely independent stuff (ie. non-label content)? Or is SoundExchange trying to extract a pound of flesh from anyone running their own station regardless of what actually plays?

In a word, yes. Technically, *if* the station and artist sign an agreement, and *register* it with SoundExchange, then no royalties will be taken. However, lacking an agreement that is registered with SoundExchange, the station *is* liable for standard royalty payments to SoundExchange, and the artist must then register with SoundExchange to receive said royalties (minus SoundExchange fees).

This places a burden on both stations and artists to manage and archive copies of agreements. There is no central clearinghouse to which independent stations and artists can turn to, to assist in streamlining this process, akin to a 'Indie-SoundExchange'. This might be a good idea, if a way were found to pay for it, and if the RIAA doesn't litigate or legislate it into illegality.

Here's the scoop from the SoundExchange site:

http://www.soundexchange.com/ [soundexchange.com] Click on the "Licensing 101" link in the right-hand column.

Cheers!

Strat