Who Gets Stung by Net Radio Royalties

Here’s a recent op/ed I wrote re: CRB Rate decision…. Link to original

Who Gets Stung by Net Radio Royalties

When the higher rates go into effect, the real losers will be independent artists, small stations—and music lovers


Editor’s note: This is the second of two Viewpoints on a decision by the Copyright Royalty Board to raise Internet radio royalty fees (see BusinessWeek.com, 5/11/07, “The Internet Radio Royalty Follies”).

A recent decision by the Copyright Royalty Board will result in substantially higher royalty rates paid by online radio stations. I’m part of a movement that opposes the increase, which takes effect July 15, and I support the recently introduced Internet Radio Equality Act, which would keep the rate increases from taking effect.

I take great offense at the press campaign by proponents of higher royalty fees to label the movement to save Internet radio as a cover for the greed of corporate-level webcasters.

I’m a director of the Roots Music Assn., a group that works for the advancement of the independent music industry and encompasses a multitude of roots-based genres. In that position, I spend most days working more than eight hours. Rarely do I take a day off, and all of my work is unpaid. The RMA has no paid employees and collects no membership dues.

We’re a collective of people working in the music business who are concerned about the current state of the roots-music industry. We’re determined to advocate for its cultural survival and longevity, both of which are threatened by the proposed CRB royalty rates.

Priceless Exposure

I’ve worked in publicity and radio promotion, and I’ve been a CD critic and editorialist. I have interviewed countless artists—from those who have just made their first record to those who have been inducted into halls of fame, from those who’ve never won a talent showcase to those who’ve won multiple Grammys, from those who’ve sold 100 albums to those who’ve sold millions.

Time after time, artists tell me: “I just want the people to hear my music.” I communicate daily with artists who often hold down three jobs so they can make music and maintain their artistic creativity while attempting to survive in the corporate maze that has become the music industry.

As I write late on a Sunday night, I have just finished speaking with an independent artist who played no fewer than nine shows this past weekend and has never received a single royalty check in his three decades in the business. He was thrilled that tracks from his new album had just been played four times in two hours on an Internet radio station. What matters to him is the priceless exposure.

If the system can eventually figure out a way to track those four spins and pay him a few pennies, he will consider it icing on the cake, but until then, he would prefer just to have the promotion.

Simple Math

Independent artists long ago seized on the Internet as a place where their musical integrity could survive, a place that built a bridge between the artist and the consumer. Internet radio is an integral part of that landscape. Instead of looking for ways to transform it into a benign parking lot, we should be looking to preserve and nurture its diversity.

SoundExchange, which collects and distributes royalties on behalf of the recording industry, would like the public to believe this is a battle between the artists and the webcasters. It most certainly is not. Artists inherently understand that when we proactively support the overall viability of the industry, we support them. The outrage against the CRB rates isn’t fueled by concerns rooted in maintaining territory or corporate interest. It’s about the growth, development, and survival of both Internet radio and independent artists.

The math is simple. Fewer avenues for airplay equal fewer opportunities for promotion. It’s reasonable to assume that small broadcasters are more likely to be liberal in their allotment of airtime to independent artists. When July 15 rolls around, few smaller stations will survive, and as a result, fewer independent artists will receive royalty payments.

Only the Large Survive

When we support diverse broadcasting alternatives, we’re supporting the growth of independent music and the survival of niche-based genres that have become all but extinct on conventional corporate radio. To insinuate that the current proposed bill is nothing but corporate greed is shortsighted and self-serving. To depict small webcasters and other partners in SaveNetRadio as stooges is disingenuous.

To imply that the Internet Radio Equality Act, versions of which were introduced in the Senate and House of Representatives, is weighted in favor of large broadcasters is a misstatement. Indeed, it’s most likely that the only stations that would survive the proposed rate structure would be big broadcasters. It’s the small broadcasters that will have to shut their doors.

This isn’t about greed, this is about fairness. This isn’t about pointing fingers, assigning blame, or determining motives. It’s about creating workable solutions. This isn’t about survival of the fittest or the best funded, but about the viability and survival of all parties—so that in the long run music and those who listen to it also can win.


Joulie is a director of the Roots Music Assn., a Wimberley (Tex) group that seeks to advance independent music encompassing a variety of roots-based music genres.

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