Saving Internet Radio - Stopping the Day the Music Dies

You may have noticed that lately many of my Breaking Blue posts have focused on the impending demise of internet radio and with it, the Pandora internet radio that I so adore.

Nancy Scola did a masterful job detailing the situation in a post a few weeks back. But a short summary of the situation is that a recent rate increase passed by the Copyright Royalty Board (CRB), and backed by RIAA, significantly increased the rates for internet music broadcasters - to the point where it will bankrupt most of them once it goes into effect.

Luckily, the CRB is part of the United States Copyright Office of the Library of Congress. Which means it comes under congressional jurisdiction. So last week, Congressman Jay Inslee (D-WA) along with Republican co-sponsor Don Manzullo (R-IL) introduced the Internet Radio Equality Act:

The Inslee-Manzullo Internet Radio Equality Act, H.R. 2060, would provide royalty parity for Internet radio providers. It would vacate the CRB’s March 2 decision and apply the same royalty rate-setting standard to commercial Internet radio, as well as satellite radio, cable radio and jukeboxes. A transition rate of 7.5 percent of revenue would be set through 2010.

There's an extra sense of urgency around all of this as the rate increases are set to go into effect on May 15th and the official website for the campaign to save internet radio, SaveNetRadio.org, has taken to calling it "The Day the Music Dies."

Late last week I was forwarded an email announcing that Tim Westergren, the Founder and Chief Strategy Officer for Pandora, would be in town on Monday lobbying Congress and had arranged for a DC townhall of sorts. Pandora being my favorite internet music broadcaster and me being a blogger of sorts with an admittedly selfish interest in saving internet radio, I RSVPed for the event.

I arrived at the sleek new be bar by the Convention Center about 40 minutes into the event, in the midst of question and answer session with the aforementioned Pandora founder Tim Westergren. About fifty or so people were seated, a mix of DC professionals, musicians, and generally people who looked a lot cooler then myself. Some government employees mentioned that they depended on Pandora to help get them through their day, since the federal government blocks a lot of websites, but Pandora was not yet one of them.

Also present at the event was a lawyer who represented an interest that I was never quite clear on. She claimed she was independent, then something about working for artists rights, and then seemed to come off as a shill for the RIAA. Her focus seemed to be an attempt to divide the internet radio coalition by focusing on the difference between the big and small broadcasters (Pandora is one of the largest) and that the big broadcasters were taking advantage of musicians. The issue itself is, of course, complex and higher rates could translate into more money for the artists broadcast on internet radio stations. But the loss in revenue from almost every internet radio station going off the air seems like it would be a much much great loss, which was the point expressed by several artists present at the event. She also attempted to introduced the idea of a secret last minute deal for the big broadcasters and screwing everyone else, which was denied by the Pandora folks.

I got a chance to ask a question of Tim, asking him whether or not he and the other internet broadcasters viewed this as primarily an Internet or Music fight. He answered that without hesitation that they viewed it as a music fight. He listed off the coalition that had been assembled including musicians, listeners, the broadcasters, NPR, profit and non-profit companies (note the common theme - music). Activist organizations and even major internet companies you'd think would be interested were noticeably absent from his list.

This actually took me by surprise, since I had thought of this fight primarily in a context similar to the internet fights we've been engaging in, like net neutrality. But I guess I can understand why an internet music company would view and approach this through a music prism.

He noted that the forces that they were going up against which would be familiar to those following the net neutrality fight. They're going up against very intrenched forces, which have influence derived from long-developed relationships with lawmakers, which their young industry doesn't have the luxury of building before May 15th. Westergren called this moment a "watershed," a "pivotal point in music space."

Tim noted the grassroots efforts of listeners and bloggers and was particularly proud that their campaign to fax members of congress had shut down the fax infrastructure on the Hill. It was almost a surreal moment, the founder of a pioneering internet venture, speaking about how a main achievement of their campaign to apply pressure to Congress was crashing the fax machines on Capitol Hill. It was at this moment that I decided that the save internet radio movement might benefit from the netroots taking a stronger interest.

As "The Day the Music Dies" fast approaches, there's a huge opportunity for the progressive netroots to join with a coalition and help notch another victory for the internet. Or music. Or whatever category this one would fall into. Plus we could introduce some of our patented "make congress pay attention to us" techniques to take us beyond the crashing the faxes stage of activism (to crashing gates).

You can start by heading over to SaveNetRadio.org and contacting your Representative and asking them to support the Inslee-Manzullo Internet Radio Equality Act, H.R. 2060. I'll be doing an interview with Tim Westergren from Pandora and speaking with someone from Congressman Inslee's office later this week, so check back soon for my follow-up.



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Re: Saving Internet Radio - Stopping the Day the M (none / 0)

Adam,

You mentioned there where rumors that the largest internet broadcasters might reach an agreement with the RIAA, leaving the smaller ones out in the cold.  There is more to that story.

When an internet broadcaster pays royalties under the statutory license, the statute also mandates that half of the royalties go to the record companies and half goes to the artists and musicians.  This 50/50 split however only applies to the statutory license.  If the record companies succeed in reaching some settlement with the largest broadcasters, the will offer a direct, not a statutory license, and under a direct license, the royalty split will not be determined by the statute but by their contracts with the artists and musicians.  Under a typical contract, the artists will get more like 10%.

In other words, the record companies are putting up this fight not only to raise the royalty rates, but also to force settlements where they no longer have to pay the musicians half of the royalties.  Its a money grab from both directions.

Congressional action is urgently needed not only to preserve public access to this music, but also to prevent the record companies from taking royalties away from the musicians.


by Alan on Wed May 02, 2007 at 07:31:32 AM EST

Re: Saving Internet Radio - Stopping the Day the M (none / 0)

i am down to help in this fight. please let me know if there are other things i can do to help.

also, adam, do you have any connections with other big bloggers that can post / raise buzz about this?


by scorinaldi on Wed May 02, 2007 at 09:04:59 AM EST

Re: Saving Internet Radio (none / 0)

Thanks for getting this on the front page. My favorite internet station (jazzplayerradio.com) terminated service on Monday in anticipation of the royalty increase and I've been grumpy all week.

One of my DFNYC colleagues had some info on this forwarded to her by her normally apolitical son, giving us the idea that this might be an opportunity to bring some new faces into the netroots movement and give them that addictive taste of grassroots activism. I'm guessing that a large chunk of internet radio listeners are wired independent-thinkers with an instinctive revulsion to high-pressure marketing - a natural progressive constituency.

I only hope that with the glacial speed of the legislative process that companies like Pandora aren't permanently dissolved by the time the legislation passes. There is also the Senate and Cheney, uh, Bush, to worry about. They might not want to piss off the media barons right before a bitter election.

by ProgressiveChristian on Wed May 02, 2007 at 09:28:27 AM EST

So what is the process? (none / 0)

My understanding of your explanation is that the copyright royalty board, as part of the library of congress, is an arm of the legislative branch.  So my question is, by what process can Congress affect what the board does?

My guess would be by a concurrent resolution of the House and Senate, without need of the President's signature, based upon what you've written.  Is that correct?


Check out McCain.
by you like it on Wed May 02, 2007 at 01:14:55 PM EST

Re: So what is the process? (none / 0)

With the caveat that I don't really know what the answer to your question is, here's what some digging turned up. The 2004 Copyright Royalty and Distribution Reform Act provides for three full time Copyright Royalty Judges, and those judges and staff are housed in the Library of Congress as the 'Copyright Royalty Board' (federal regs call the CRB an "institutional entity in the Library of Congress.") The judges are appointed by the Librarian of Congress, who is him/herself appointed by the President. So it seems unlikely that the CRB is under the aegis of Congress in a way that would require only a concurrent resolution.

That said, it would great if someone who really knows these particular ins and outs of government could provide some clarity.
by Nancy Scola on Wed May 02, 2007 at 10:07:15 PM EST
[ Parent ]

Re: Saving Internet Radio - Stopping the Day the M (none / 0)

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by habibi on Thu Feb 28, 2008 at 11:37:48 PM EST


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