Update: Internet Radio's Day of Silence is...Today

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Those of you who listen to Internet radio stations such as Rhapsody, Pandora, or MTV may have noticed that there isn’t any music being broadcast today. That’s because today is the Official Internet Radio Day of Silence. As was reported earlier, today’s silence is to draw attention to the new royalty rates for webcast music that go into effect on July 15th (retroactive to January of last year). Many in the industry believe that these new rates will cripple independent Internet radio, if not destroy it all together. The new royalty rates will drastically increase the current royalty rate paid to RIAA offshoot SoundExchange. Some smaller webcasters will be able to pay a smaller annual fee, but only if they severely limit the number of people who stream their stations. Larger Internet radio companies may have to fork over close to a billion dollars in fees.

Here's how they say they derived that figure: When the CRB decided earlier this year to change the rules for Internet broadcasters, it also decided to levy a $500 minimum annual fee per Internet radio "channel." SoundExchange, the non-profit music industry entity that collects the royalty and other fees on behalf of record labels, says that minimum payment is supposed to cover administrative costs.

But since some of the larger Internet radio services potentially offer their listeners hundreds of thousands of unique "channels" (RealNetworks' Rhapsody offered more than 400,000 in 2006 alone, according to a company spokesman), the companies view the ruling as forcing them to multiply that mandatory minimum payment accordingly (for Real, that would amount to $200 million.)

Such an amount would far outpace the $20 million in total royalty fees collected by SoundExchange from the Internet radio industry last year, the CEOs note in their letter. And besides, it's not even clear that those payments would go to artists, as royalty payments do, the companies argue.
So who and what is SoundExchange? Ostensibly, they are the group responsible for handing out royalties to RIAA recording artists. Sounds like a pretty reasonable group, right? Well, maybe it would be, but according to its own website thousands of artists have gone unpaid because SoundExchange can’t find them. I’m sure with the new money they’ll be raking in from webcast music they’ll be able to find such shrinking violets as Ted Nugent.

Then there’s the story of Sound Exchange consultant Hank Medress who got rich off of “The Lion Sleeps Tonight” while the original writer and singer, Solomon Linda, died penniless in South Africa. A class act and perhaps the best example of the RIAA’s “do as we say, not as we do” policies.

If you miss your Internet radio, please contact your Senators and Representatives and urge them to support the Internet Radio Equality Act.

web address: http://suicidegirls.com/news/music/21757/Update-Internet-Radios-Day-of-Silence-is...Today/