Digital Media Association Rejects SoundExchange’s “Stay Of Execution”

New regulations to go into effect on July 15th require each webcasters to pay a $500 minimum advance on royalties “per station or channel”.  Do the math and you’ll see that a service like Pandora or Last.FM who create thousands of custom streams would easily be put out of business.  Yesterday in a press release SoundExchange offered a cap of $2500 against future royalties no matter how many streams a broadcaster offered.

But in a scathing response, Jonathan Potter, Executive Director of the Digital Media Association said, “DiMA would agree to a $2,500 per-service cap for the entire term of the CRB ruling (through 2010), but not the partial-offer presented to us in writing, which would terminate in 2008. Any offer that doesn’t cover the full term is simply a stay of execution for Internet radio.”

“The looming 2009 billion-dollar threat is destabilizing and inhibits investment and growth. DiMA, like thousands of artists and millions of consumers, wants a solution that promotes long-term industry growth,” he continued. “A billion-dollar “minimum fee” is equally absurd in 2006, 2007, 2008, 2009 or 2010.  It should be eliminated – period. DiMA is disappointed to have to issue this statement; we would prefer to resume negotiating important issues directly with our counterparts rather than through press releases.”

In celebration of Canada Day weekend

Since Canada day is coming up — thought I’d share some of my favorites….Happy Canada Day to my fellow Canadians

Blue Voodoo

Ian Tyson Eighteen Inches of Rain

Gordon Lightfoot – If You Could Read My Mind Love

Ian and Sylvia

Stompin Tom – Margo’s Cargo

Fred Eaglesmith – Alcohol and Pills

kd lang – Crying

Doug Lang

Willie P Bennett – Blue Valentine

Colin James

Blackie and the Rodeo Kings   Swinging from the Chains of Love
(there’s annoying noise on the intro of this one)

Small Business Committee hears testimony

www.kurthanson.com
BY DANIEL MCSWAIN
The House Small Business Committee heard testimony today from a variety of webcasters, artists and record label execs both in favor of and against  the Copyright Royalty Board’s decision to dramatically increase performance royalty rates for webcasters.

Given the impact of the CRB royalty rates on webcasting small businesses, the Small Business Committee could be a key ally in pushing the legislation. Currently, 12 Representatives who have co-sponsored H.R. 2060 sit on the Small Business Committee.

Below is a list of participants in today’s hearing, divided into columns by witnesses who will be testifying against the CRB rate hike (left) and in defense of the new rates (right):

Bryan Miller La La Media, Inc. & WOXY Palo Alto, CA	Tom Silverman Chairman Tommy Boy Records New York, NY
Joey Allcorn Artist Columbus, GA	Cathy Fink Artist Washington, DC
Kieran Kelly Co-Owner Stunning Models on Display Records Astoria, NY	Thomas F. Lee President American Federation of Musicians New York, NY
Richard Eisworth President, General Manager & CEO Cincinnati Public Radio Cincinnati, OH

RAIN will continue to update the table below with excerpts and highlights from the hearings as footage of the event is released. Below the table of highlights from the hearing, we’ve prepared excerpted versions of some of the written testimonies provided to the Comittee prior to today’s meeting.

Nydia M. Velazquez (D-NY): “…Though Internet radio broadcasters of all sizes offer webcasts,many of the leading providers are small companies employing fewer than 50 employees.”Given the consolidation of media ownership that we have seen in recent years, the growing popularity of a broad array of small and independent webcasters is a promising sign. Listeners want greater choice with respect to music content and Internet radio services of all sizes are providing just that.”

Steve Chabot (R-OH): “…Time is of the essence for all the parties…“…The exposure and audience reach that artists have experienced because of the Internet is beyond compare, providing opportunities for a diverse range of artists and labels who never thought it possible… However, the recent decision by the Copyright Royalty Board to increase royalty fees may jeopardize the mutually beneficial relationship [between webcasters and artists]… The decision and the outcry that has resulted raises questions and concerns. “I find it somewhat troubling that we are here revisiting these issues yet again just 5 years [after the 2002 CARP hearings]. This lends me to question the effectiveness and flexibility of sections 112 and 114 of the Copyright Act, and the ability of these provisions to promote and encourage creativity, encourage the use of the most advanced delivery mechanisms…, and ensure fair compensation for those who have created works protected by the Copyright Act.”

Bryan Jay Miller, GM WOXY.com: “Whatever you hear or believe about big webcasters being able to pay higher royalties, the truth is that smaller independent webcasters are still struggling to get by in this very exciting but still very young industry. There is a tremendous challenge to deliver the value and innovation that listeners demand while maintaining a viable business.“The CRB’s decision is grossly out of sync with the economic reality of small webcasters… We deliver something so unique for artists and music fans that our existence should be supported and encouraged and not hindered during the early years of our industry. “Musicians stand to lose valuable exposure provided by Internet radio outlets. One of the reasons millions of people visit Internet radio sites every month is that they’re looking for something new. Consumers are now turning to Internet radio to discover new artists.” “Webcasters going out of business is a lose/lose for artists… Consumers will also lose if there’s a mass extinction of Internet radio stations.”

Tom Silverman, owner Tommy Boy Records: “As to the fairness of the rates, they were determined by three impartial judges specifically selected for their knowledge and understanding of this industry… It was a fair decision…“What irks me… is the attitude expressed by a few small webcasters who became engaged in a grassroots campaign primarily financed by large webcasters. They got people’s attention, including some members of Congress, by claiming that small webcasters would be hurt. “Congress asked SoundExchange to give webcasters below market royalties… to allow them a chance for the businesses to gain more steam… That discount offer does not seemed to have stopped the push to cut our royalties. I know what that’s about: it’s about ‘Big Net Radio’. “Our businesses are very different from webcasters, some of whom simply pay a monthly service fee, plug in their computers and stream… it’s all about fairness.”

Witness testimonies were followed by a protracted “Question & Answer” period conducted by the members of the Committee. A few highlights from that part of the session include: When asked about a possible way forward for all parties that would produce a compromise, AFM President Thomas Lee said that “SoundExchange has offerred to put a $2500 cap on [the $500 per channel minimum fee].”Later, Lee went on to posit that “SoundExchange is attempting to resolve the differences with [small webcasters] because we understand that perhaps in the CRB procedure there may have been a flaw, and that flaw needs to be corrected.” Artist Cathy Fink, when asked about the existence of any “common ground” between webcasters and artists, said that she felt that fears of widespread bankruptcy among small webcasters as a result of the new rates were overblown, noting that, “It is unrealistic to portray this as if every small webcaster is going to go down the drain because of this. I don’t think that’s a fair portrayal of what’s going to happen here.” Artist Joey Allcorn, prompted with the same “common ground” question, responded, “The common ground for artists is that Internet radio is a viable promotional tool for people like us. I want to get royalty payments, I depend on them… but is it worth attacking these webcasters and putting them out of business with these extreme royalty rates?… Is the promotional value worth more than the royalties? In my case, I say yes.”

Joey Allcorn, independent artist from Columbus, GA: “Internet radio is one of the greatest opportunities for the 21st-Century recording artist. It helps fans find new music, it helps artists find new fans, and leads to new and unexpected performance and touring opportunites, and yet still pays royalties. What a great combination.

“But if the Copyright Royalty Board royalties are implemented and webcasters go silent permanently as they did Tuesday for the Day of Silence demonstration, then all these benefits will be lost. The higher royalty rates from fewer webcasters will benefit only a few big artists, just as broadcast radio benefits a few but leaves most independent artists like me ‘high and dry.’..

“None of my success comes from mainstream FM radio or happens in Nashville where the major studios are based. My business… grows and thrives on the Internet… Internet radio changed my business and expanded my opportunities a thousand-fold…. Artists just like me have found a home on Internet radio where we can reach people who appreciate the kind of music we do…

People would come up to me at shows and say, ‘I bought your album on the Internet,’ ‘Heard your music  on Last.fm,’ or ‘Pandora‘ or any of these services, and that changed my world…

“It’s ironic that Internet radio is helping me make my career and is one of the best places for me and those like me and my fans to discover one another, but these royalties might completely shut these opportunities down…

“With low barriers to entry into Internet radio, I can build my audience one listener at a time, one city at a time, with the music that I love. In a way, I guess you can call Internet radio the greatest grassroots music movement ever.

“All this opportunity makes these drastic new royalties even more bizarre to me. Here’s a new radio outlet that has  broken the industry wide-open for independent artists and small labels. It pays royalties to artists who don’t get paid on broadcast radio and is the only medium with a ‘Buy’ button next to the song titles. Yet three judges from somewhere I’ve never heard of decide to raise webcasters’ royalty rates so they will go out of business. And if that happens my career, my small business, and my fans will suffer…

“These new royalties will kill the small webcasters first, but then, one-by-one, as time goes on, they will kill the larger ones as well. If that happens, the opportunities lost for independent artists will be painfully real…

“Please understand this isn’t about greed or pointing fingers at some big radio or big label conspiracy. The beauty of Internet radio is that it supports so many artists and genres, many of whom corporate radio and major labels would never be interested in anyway.”

Today’s House Small Business Committee on the CRB Royalty Rates

More than 14 Million Net Radio Listeners Turn Up the Volume In Congress

National Day of Silence a ‘Tremendous Success’

WASHINGTON, June 27 /PRNewswire-USNewswire/ — Organizers of yesterday’s national Day of Silence — observed by more than 14,000 webcasters — reported today that more than 14 million Net radio listeners visited SaveNetRadio.org, and nearly 400,000 phone calls were placed to members of the House and Senate calling on Congress to enact legislation that would preserve the future of Internet radio during the day-long protest.

The Day of Silence was initiated by the Radio and Internet Newsletter (RAIN) and sponsored by the SaveNetRadio coalition.

“The silence that greeted millions of Internet radio listeners yesterday certainly turned up the volume in Congress,” SaveNetRadio spokesperson, Jake Ward said. “Yesterday’s Day of Silence was a tremendous success but the clock continues to tick on the future of Internet radio, and with more than 14 million hits on the SaveNetRadio website and almost 400,000 thousand phone calls made to Congress yesterday alone in support of the Internet Radio Equality Act, it is time for Congress take action.”

To date more than 400,000 emails and letters have been sent to Capitol Hill by supporters of Internet radio and an estimated half a million phone calls have been made to individual offices.

“SaveNetRadio would like to thank every listener for their contribution to saving Internet radio and for their patience while the music they love and enjoy was temporarily disrupted. The coalition also thanks every webcaster who participated in yesterday’s Day of Silence, many of whom made financial sacrifices to ensure their listeners were aware of the threat looming over the industry,” Ward continued.

The Internet Radio Equality Act would vacate the CRB’s decision and set a 2006-2010 royalty rate at the same level currently paid by satellite radio services (7.5% of revenue.) The bill would also change the royalty rate- setting standard used in royalty arbitrations, so that the standards applying to webcasters would align with the standard that applies to satellite radio royalty arbitrations. The bill also re-sets the royalty rules for noncommercial radio such as NPR stations that offer Internet radio music.

A hearing on H.R. 2060, the Internet Radio Equality Act, has been scheduled for Thursday, June 28th in the House Small Business Committee.

For more information on the SaveNetRadio coalition visit http://www.savenetradio.org/.

Website: http://www.savenetradio.org/

Stony Plain To Release The Gift: A Tribute To Ian Tyson

EDMONTON, AB, Canada (Top40 Charts/ Stony Plain Records) – Ian Tyson has been one of Canada’s most distinctive songwriters for more than 40 years. Since the early ’60s, he has created a spectacular body of work – and now a distinguished group of Canadian and American artists have recorded some of his classic songs for a tribute album in his honour. The album has been in the works for more than a year. Stony Plain Records’ Holger Petersen and award-winning music journalist Peter North asked Tyson’s friends, associates, admirers and one-time sidemen to contribute, and shepherded their songs through production. The response was both positive and immediate. The result is The Gift: A Tribute to Ian Tyson, with 15 of his songs performed by an all-star cast including Blue Rodeo, Jennifer Warnes, one-time Byrd Chris Hillman, Gordon Lightfoot and rowdy Alberta renegade Corb Lund. Former musicians who have worked with Tyson over the years – David Rea, Stewart MacDougall, Amos Garrett, Cindy Church, Buddy Cage and Jeff Bradshaw – all contributed tracks. Other participants include Ramblin’ Jack Elliott, The Good Brothers, The McDades and Tom Russell. The CD joins a Stony Plain catalogue that already boasts more than a dozen Tyson albums, including 1986’s platinum selling Cowboyography. Tyson has been a Stony Plain artist since 1985. And all of his earlier solo material has been reissued by the label. Stony Plain’s catalogue is distributed by Warner Music Canada. Tyson, who marks his 75th birthday next year, continues to run the Tyson Ranch in the foothills of the Rockies south of Calgary – and tours in Canada and the US, playing some 75 concerts a year. He’s a member of the Juno Hall of Fame and a recipient of the Order of Canada. Said producer Peter North, longtime music writer for the Edmonton Journal and as music director of Alberta’s CKUA radio network: “Tyson’s songs cross a musical landscape that includes the folk revival of the ’60s, the birth of country rock, hardcore honkytonk music and his own chosen place as a spokesperson for cowboy culture. “A tribute to Ian, who is certainly not ready to call it a day on the ranch, has definitely been in order for some time now.” The first single from the album – already sent to radio stations across the country – is Blue Rodeo’s interpretation of Tyson’s best- known song, “Four Strong Winds.” Covered by dozens of artists, including Neil Young (who still includes it in all his concerts) Johnny Cash, Bob Dylan and others as varied as The Kingston Trio and The Tragically Hip, “Four Strong Winds” was also chosen by CBC Radio listeners as the greatest Canadian song of all time. The Gift includes versions of Tyson’s finest songs, offering passionate performances, framed by the artistry of the man to whom tribute is being paid.

Canadian Study – Younger listeners abandoning radio

Last Updated: Tuesday, June 26, 2007 | 12:16 PM ET

CBC Arts

Teenagers and young adults are turning away from conventional radio, probably so they can listen to digital music players and online music, according to a new study from Statistics Canada.

Average hours of radio listening per week
Age 12-17	7.6
Males 18-24	13.7
Females 18-24	14.6
Males 25-34	19.7
Females 25-34	16.9
Males 35-49	21.6
Females 35-49	19.7
Males 50-64	21.2
Females 50-64	20.9
Males 65 and over	19.5
Females 65 and over	22.7
All Canada	18.6
Source:  Statistics Canada

Teens aged 12 to 17 listened to a mere 7.6 hours a week of radio, according to a survey taken in fall 2006.

That’s down from 8.6 hours in 2005 and 11.3 hours in 1996.

The trend away from radio listening seems to reflect a preference for music on digital players such as iPods or new music heard over the internet, Statistics Canada said.

Among young adult men aged 18-24, listening fell to 13.7 hours a week from 15.1 in 2005, and young women listened to only 14.6 hours a week, down from 15.4.

By comparison, the average Canadian tuned into the radio for 18.6 hours a week.

Senior women continued to be the most frequent radio listeners, saying they had the radio on for 22.7 hours per week, while senior men listened to 19.5 hours.

CBC Radio was the most popular station for senior men and women across Canada, and least popular among young adults.

The most popular radio formats vary widely across the country, with Albertans more likely to listen to country and golden oldies, and Newfoundland and Labrador residents most likely to choose talk radio.

Overall, adult contemporary music was still the first choice of Canadians on the radio, capturing 22.3 per cent of listeners, followed by golden oldies, with 13.9 per cent.

The CBC was third place in overall format ranking in 2006, with an 11.6 per cent share of the total listening audience. It rebounded from 2005, when a labour disruption reduced its share of listeners to less than nine per cent.

British Columbians and Nova Scotians are particularly keen on their CBC stations, with about 17 per cent of the audience in those provinces tuning in.

Day of Silence aftermath

www.kurthanson.com

BY DANIEL MCSWAIN and PAUL MALONEY
National and international mainstream press outlets devoted lots of air time and print space to yesterday’s “Day of Silence” event, evidence that one of the day’s goals — alerting listeners about the imminent threat faced by webcasters with the help of various media outlets — was immediately successful.

Below is a table of some of the major press coverage of yesterday’s “Day of Silence”. The table will be updated as more coverage of the event is published.

	Internet Radio Outlets Protest Royalties
	Online Music Hushes in Face of Money Fight: Federal Discord Over Royalty Hikes
	Internet radio stations to protest royalty hikes – They will replace music with silence today to fight royalty rate hikes
	Online Music Goes Silent to Weigh In
	‘Day of Silence’ Makes Noise on the ‘Net
	‘Day of silence’ for US web radio
	Day of Silence: Internet Radio Goes Dark
	Day of silence for Net broadcasters ACTION TO PROTEST SONG FEES STATIONS SAY COULD SHUT THEM DOWN
	Webcasters let it all go silent to protest growth in royalties
	A kind of hush all over Web radio
	Web radio stations plan day of silence to protest fees
	Protest will silence some online music – Participants upset about plan to increase fees to recording companies, musicians
	Webcasters silence radios in protest
	Net radio battles royalty ruling with silence
	Internet radio ‘silence’ protests royalties hike
	Radio Free Internet: Broadcasters Protest Rate Hikes With Silence
	Web radio sites go silent in protest New licensing fees could doom Internet radio, but webcasters are fighting back with a ‘Day of Silence’
	Web Radio’s ‘Day of Silence’ Protests Royalty Increases
	SoundExchange Reacts To ‘Day Of Silence’
	Net Radio Protests Rates: Webcasters see a groundswell of support from net radio supporters on “Day of Silence”
	Webcasters Observe ‘Day of Silence’ to Protest Royalty Rates
	Online radio outlets plan silent protest
	Internet Radio Observes Day Of Silent Protest
	If You Like Online Radio, Call Your Congresspeople — Seriously
	Web Radio Stations Hope Silence Speaks Volumes About Fee Hike
	Is Silence Golden?

On another IREA-related note, Rep. Jay Inslee (D-WA), one of the original sponsors of H.R. 2060, stood in front of the House yesterday to alert Congress that millions of people are in danger of losing Internet radio unless swift action is taken to push the Internet Radio Equality Act into law.

Band Width

http://www.sfweekly.com/2007-06-27/news/band-width/

By David Downs 

Published: June 27, 2007

Local musicians air their views on the threat to Net radio

Subject(s): Downs on artists speaking out

Ted Nesseth

The Heavenly States

(Oakland rock quartet since 2000)

“I started listening after Napster went down, seeing who would pick up the torch and carry it. Every time the industry explodes the record companies try to scoop it back up and collect on it. The Net is the next explosion and this is their way of trying to maintain control. To me there’s a direct effect of people listening during the day and planning what to do that night. People are so hooked in now and have the opportunity at every moment to have access. It’s part of what is changing about music.” Nesseth adds, “More of something is always good, unless it’s VD.”

Stephen Rodriguez

The Otherside

(S.F. indie band since 2004)

“I have friends in terrestrial radio who are supporters of the band. I think they are not only aware of us via the Web and podcasting, they’re constantly listening to see what’s bubbling up. Webcasters are the root. If you think Live 105’s Aaron Axelsen is going to find out about you just because you’re so damn cool, you need a reality check. These are the guys helping guys like Aaron Axelsen to find things.”

Bryan Aubert

Silversun Pickups

(Honorary S.F. band from L.A.)

“When we put out our EP we just expected to sort of put it out and share it with people who already knew us and we would be happy. And it was really weird because of certain online stations. Seattle’s KEXP is big online, and when they started playing us it was just crazy. All at once, the amount of messages we were getting versus from other things was significantly higher. A lot of it was coming from Seattle, and then people from Honduras were like, ‘We listen to KEXP.’ Then we started getting spun on local big modern rock stations.”

Unpaid in Full

http://www.sfweekly.com/2007-06-27/news/unpaid-in-full

How musician royalties are being pocketed by SoundExchange

By John Nova Lomax  and  David Downs

Published: June 27, 2007

The IRS of digital performance royalties, SoundExchange, claims it can’t find thousands of often-popular artists to pay them their money. The deadline to contact them passes on June 30 for unclaimed royalties at least three years old; SoundExchange could pocket up to an average of $360 from thousands of the lowest-paid musicians in the world. Furthermore, all of the nonprofit’s collections and disbursements are private, so the public doesn’t even know how much SoundExchange is pocketing.

Subject(s): Lomax and Downs on musicians owed money

Low staffing at the 28-person royalty collection agency and notoriously flaky artists who don’t or won’t sign up have hindered the process, which sounds simple enough: Satellite radio, digital TV, and Webcasters pay SoundExchange, then SoundExchange disburses the money by sending it to those who’ve properly filled out the forms.

Over the past seven years, SoundExchange has found and paid thousands of artists, but admitted it can’t find about 25 percent of the people it has been looking for. Today, that number stands at more than 8,300 artists, including plenty of notable acts like Danzig and Kraftwerk.

Obviously, some of these “lost” people are deceased; in that case, SoundExchange is looking for their heirs. And please note that the list is very long — check yourself at SoundExchange.com. Latin bands are especially numerous — any readers with expertise in that area should go over the list carefully, because we’re guessing SoundExchange’s Spanish outreach program es muy malo. Bands who find themselves on the unpaid list need to go to SoundExchange’s Web site for a step-by-step on how to collect.

SoundExchange has said that it has have actually found many of the 8,000-plus artists on the lost list, but that many of them have simply failed to send in their paperwork.

Indeed, Elise Nordling of SomaFM has horror stories of shattered bands owed $1,000 who hate each other so much they refuse to get in the same room with a notary to authorize disbursement. “Some say it’s just not worth the $250 check,” Nordling says.

Musician flakiness aside, one wonders how hard SoundExchange has truly sought some of these artists. There’s no small potential for mischief here. When an agency gets to keep the money it is supposed to be doling out to people it is responsible for finding, it is easy to detect at least a possible conflict of interest. And if SoundExchange loses money every time it finds an artist it is supposed to pay, what is its incentive to actually do its job? Are we really supposed to trust an organization that claims it can’t find Max Stalling (www.maxstalling.com), Vicente Fernandez (hint: Try Mexico), or freaking Fat Joe?