Music News

Last week the Copyright Royalty Board, an oversight body created by Congress to settle royalty disputes in the music business, dramatically increased royalty rates for web music broadcasters that may put many internet radio and internet streaming programs out of business. Right now traditional radio only pays royalty fees to songwriters and copyright holders. Webcasters, on the other hand, pay fees to both the songwriter and the artist who performed the song. And now they'll have to pay even more. In addition to sinking web-based music outlets, musicians will also be affected by new laws. Many underground and independent artists depend on music blogs and internet radio stations to get their music heard.

Jim and Greg wanted to talk to people on both sides of the issue. First they talk with John Simson, the Executive Director of SoundExchange. SoundExchange represents the artists and labels and is the collecting and distributing body for these digital royalties. Simson thinks the argument that artists are benefiting solely from having their music played by internet radio stations is flawed. While he understands that there is the potential for musicians to get greater exposure from this kind of airplay, he's yet to see any evidence that they are selling more records. He supports a flat per-performance rate for all webcasters, and adds that up-and-coming artists who want internet exposure can strike their own deals.

Next, Jim and Greg invite Jonatha Brooke into the conversation. Brooke is a singer/songwriter and owner of Bad Dog Records. She testified before the CRB in support of these higher rates. Our hosts wonder why an artist would want to bite the hand that feeds them, so to speak, but Brooke argues that she isn't being fed that well. Like Simson, she disagrees with the notion that the digital airplay is giving her more business and helping her to sell more records. A small business owner herself, Brooke can sympathize with small webcasting outlets, but thinks they should have to pay for a product they are using just like anyone else.

Finally, we hear from Bill Goldsmith, a webcaster who will be affected by these new rates. Goldsmith and his wife run Radio Paradise, an internet radio station that serves about 12 - 15,000 listeners a day. He explains that he will have to pay almost half a million dollars for his retroactive 2006 fees alone. This, of course, will sink him, but it's not just the small and midsize outlets that will suffer. No single digital music broadcaster, even large stations like Pandora, will be able to survive with the new regulations.

So what's the solution? Jim thinks that lawmakers should eliminate the inequity between terrestrial radio, who has huge lobbying power and influence in Congress, and internet streaming radio, who are essentially the new, little guys on the block. Greg takes issue with the one size fits all approach the CRB and SoundExchange are currently using. He and many organizations like the Future of Music Coalition, support a structure that sets reasonable rates for different categories of webcasters.