No truce in store; RIAA fails in attempt to attack Internet radio
Believe it or not, there was a time when music executives and music listeners did peacefully co-exist. We bought CDs, they drove fancy cars and no one asked questions. That, of course, was before our time. For better or worse, our generation knows a world where there is indeed a free lunch when it comes to music.
The peace is gone, and The Recording Industry Association of America has panicked. They can do nothing but watch their bottom line be destroyed by independent industry segmentation. So they’ve decided to fight fire with fire, first declaring war on the music fans themselves (suing college students for file sharing) and now attacking the equivalent of the neighborhood weakling, internet radio broadcasting.
Weak, of course, is a relative term. Internet radio is a valuable asset for musical distribution that is spreading like wildfire with groups like Pandora Radio leading the way.
The concept of Pandora is simple. Users enter their favorite artist into the music database and receive a “radio station” with songs from that artist and others that match musically, with the only price paid being a limit on the number of songs one can skip per hour.
“The fundamental idea has always remained the same,” said founder Tim Westergren.
“It provides a really wonderful platform for music discovery.”
Pandora foots the bill under the Digital Millennium Copyright Act by paying out scheduled royalty rates to artists and record labels and, until lately, have done so pretty seamlessly. However, at a scheduled arbitration hearing a few months back, Web casters were blindsided by new royalty rate increases that threatened to topple Pandora and others.
“(The rates) were so high that they would really bankrupt the whole internet radio business,” Westergren said.
But you can’t blame the RIAA, right? This was an “objective” arbitration panel. Yeah, and Paris Hilton’s album was really good. This panel, no doubt, was made up of post-middle-aged baby boomers who remember the glory days and are stuck in a business model and mindset that just doesn’t work in today’s industry (much like, say, the executives of the RIAA).
The fight was about as fair as Steve Erkel being thrown into the ring with Ali – the non-subscription bearing Web casters had no shot against the suit-wearing sharks in Washington and the RIAA. Enter an unlikely savior – us. You. The people. The Internet broadcasters pleaded with their registered listeners to petition their congressional representatives to use their intervention powers.
Like a cheesy underdog movie, it worked. Senators received over one million letters from their constituents and internet radio was granted a stay of execution by Congress.
It worked because we see what they can’t or, more likely, refuse to accept. The industry isn’t owned by a few big players anymore. It’s owned by MySpace, Indie labels and it’s soon to be owned by groups like Pandora.
The money has to come from somewhere, but the politicians are barking up the wrong tree here. Internet radio is harmless and, in theory, could be beneficial to musicians and labels of all sizes. The files on Pandora and all other legit internet radio stations are not downloadable. Clean play counts are kept for royalty distribution and, in some cases, exposure to new artists could even lead to record sales down the line.
The RIAA is halfway in a grave and digging it deeper. If this proves anything, it’s that politicians and old rich dudes alike can’t hold down the popular vote forever. Don’t stop here. Keep writing those letters on behalf of the Web casters and others who deserve protection.
- Alec Wooden will be the fall Out & About editor.
