Tuesday, June 26th, 2007
Suw and I listen to lots of podcasts and online radio and use services like Pandora and Last.fm. We are supporters of Soma FM because we love the music especially Secret Agent. But today, Pandora, Soma and a host of other online radio sites including heavy hitters like MTV Radio, Launchcast, Real’s Rhapsody and Live365 are silent. Why? They might be priced out of the market by dramatic changes in music licencing.
As Rusty says on the Soma FM site:
Royalty rates for webcasters have been drastically increased by a
recent ruling and are due to go into effect on July 15 (retroactive to
Jan 1, 2006!). SomaFM will be liable for $600,000 in additional
royalties for 2006, and over $500,000 for the first half of 2007. As of
July 15th, we will owe $1.1 million dollars in additional royalties.
Tim Westergreen at Pandora put it this way:
Ignoring all rationality and responding only to the lobbying of the
RIAA, an arbitration committee in Washington DC has drastically
increased the licensing fees Internet radio sites must pay to stream
songs. Pandora’s fees will triple, and are retroactive for eighteen
months! Left unchanged by Congress, every day will be like today as
internet radio sites start shutting down and the music dies.
This Day of Silence is similar to another successful event in 2002 that led to the Small Webcaster Settlement Act for the period of 1998-2005.
When I first heard about this proposed rate increase, I thought back to something that Ben Hammersley said at the Guardian Changing Media conference earlier this year that entertainmentt industry was acting like someone who had just got a Valentine’s card from their lover (music and movie fans) and was ripping that card up in her face.
I’m a music fan, not a thief. I pay for music, and the music industry is yet again punishing me, a music fan. What business survives and thrives by protecting a business model by punishing the very fans that support that business model? Loyal fans will travel hundreds of miles for a concert, hunt through stacks of vinyl for that out of print record and pay money for music. Fans might not pay the margins for a download that the music industry was used to in the era of the CD, but that is an issue of margins, not passion.
But after covering the music industry years, I don’t see them letting go anytime soon. Hey, compadres back in the States, go ahead and send your member of Congress a loud and clear message. A little democracy in action. It worked back in 2002, and hopefully, it will work again. If it doesn’t, it won’t be just one day of radio silence on the internet.