SoundExchange Attempts to Corner Internet Radio Airplay Market for Big Labels

SoundExchange Attempts to Corner Internet Radio Airplay Market for Big Labels


NewswireToday – /newswire/ – Washington, DC, United States, 08/22/2007 – With Congress breathing down it’s neck and the Internet Radio Equality Act hanging over it’s head, SoundExchange again tries to fool everybody into thinking they’re trying to be fair with Internet Radio.


The recent offer in the press releases from SoundExchange is just more propaganda designed to releive pressure from congress to come to an equitable deal. The “discount” they have offered only applies to music recorded by SoundExchange member artists and labels.

Not long ago, some numbers were released by Live365 which stated that between 56 and 70% of all music played on their member stations comes from independent artists and labels leaving the major labels with 30-44% of internet airplay. With RIAA labels getting the minority of airplay, it is in their best interests to discount the royalties to their artists, while maintaining the high royalty costs for independents. This will lead most small webcasters to focus mostly on the major label bands, leaving independent artists and labels with far fewer outlets.

SoundExchange and MusicFIRST say that radio play is hurting cd sales, but here they are setting themselves up for more internet radio airplay, not less. One of the great things about internet radio is the opportunity to break new music that terrestrial radio isn’t playing. There will be a lot less of that if stations sign this agreement. Now that SoundExchange and the labels have targeted terrestrial radio for these performance royalties, it would be interesting to see some major company like ClearChannel flip to all indie formats and see what happens to CD sales.

This is SoundExchange, yet again pretending to offer us a deal so that congress can see them as benevolent, while they’re really just cornering the internet radio market to increase airplay for the major labels. While Congress will likely see this as a genuine offer from SoundExchange, the only clear solution is for the Internet Radio Equality Act or some similar bill to be passed.

Internet radio stations have asked questions of SoundExchange with no response. There have been offers made to SoundExchange with no response. I have a few questions that I would love answered.

1. Didn’t the major labels just wrap up a payola scandal caused by the need for radio airplay to promote and generate a buzz to sell albums?

2. Why does the label get 50% off the top, while the artists divide the remainder if this is about making sure the artists get paid?

3. Is this new offer also going to require DRM implementation on our streams?

4. Why do you continue to mention 13 years as if it starts today when we all know that these offers all expire in less than 3 years?

5. How much of the artist royalty is being given to MusicFIRST to lobby congress and how much is coming from the label’s percentage?

6. Under the Small Webcaster Act, webcasters pay royalties not just based on revenue, but based on a combination of operational costs and revenues. If a station spends more to broadcast than the revenue they generate, they pay royalties on operational costs rather than revenues. Why do you pretend that broadcasters with no revenues pay no royalties?

When some of these questions have been answered and some of the confusion and misleading statements from SoundExchange have been clarified, maybe we at ThereIsNoRadio will take one of their offers seriously. SoundExchange has proven time and time again that they are nothing but an additional arm of the RIAA and cannot be trusted. Internet radio simply cannot grow as an industry knowing we could all be forced into bankruptcy every few years or as soon as we break an arbitrary revenue or listener ceiling.

Visit SaveNetRadio and call your congressional representatives and demand they take action on the Internet Radio Equality Act immediately.


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