Webcasters
don't want music to die THE
FLINT JOURNAL FIRST EDITION
Thursday, July 12, 2007
By Marlon Vaughn
mvaughn@flintjournal.com • 810.766.6324
Hip-hop
fans from Saudi Arabia to the Netherlands log on
to hear Flint Internet radio station The
Miz's Webcasts, says proprietor Eric
Thomas. But if new
royalty rates for Webcasters go into effect as
scheduled on Sunday, Web radio will go the way
of the cassette tape, he asserts.
" Internet
radio is going to go bankrupt - it'll be gone," said
Thomas, whose station streams from the StreetLevel.biz Web
site.
The
Copyright Royalty Board, a three-judge panel created
by Congress to set digital music royalty rates,
agreed on a significant increase in rates retroactive
to 2006 for companies that stream music over the
Internet. The board's decision could mean Webcasters
will pay 20 percent more to stream music in each
of the next three years.
Mark
Lam, who heads California-based Live365 Inc., said
the new royalty rates will squash the diversity
of music Internet radio provides.
" In
many big markets there's no classical station," said
Lam, whose company is one of the nation's largest
Internet broadcasters. "I don't think Congress
intended for this to happen. This takes away choices
for the maximization of profit."
But
supporters of the new royalty rates argue that
the increase will pay artists and record labels
what they deserve for the music they created. They
argue that a U.S. Senate bill introduced to reject
the CRB's decision is a "money grab" by
big corporations like Clear Channel, Yahoo! and
AOL, which would stand to save $100 million in
payments.
" I
don't see any other way to characterize this as
anything other than naked corporate greed," said
John Simson, executive director of SoundExchange,
in a news release. SoundExchange describes itself
as a "nonprofit performance rights organization
... united in receiving fair compensation for the
licensing of their music."
But
small Webcasters like Thomas beg to differ. While
giants like AOL might survive the rate increase,
the small-scale casters will die quickly. He describes
the rate increase as inherently unfair because
traditional radio only pays royalties to publishers
such as the American Society of Composers, Authors
and Publishers (ASCAP), and not to the performers
or record companies. Digital broadcasters, including
Internet and satellite radio providers, pay both.
" We're
calling the 15th the day the music dies," he
said.
Lam
said his company, which was formed during the dot.com
boom of the late 1990s, earned its first annual
profit last year, and it was just a few thousand
dollars. The retroactive fees for 2006 alone could
cost Live365 about $5 million, he estimated.
" The
music industry is under siege from music pirates
... and they're grasping at straws to stay afloat," Lam
said. "The music industry continues to confuse
us with the pirates."
And
the music industry, already in turmoil because
of a massive decline in compact disc sales, is
killing a 70 million-listener medium it should
view as a partner and not a foe, Internet broadcasters
say.
The
Miz often spotlights music by up-and-coming artists,
from Flint and elsewhere. The station was streaming
rapper Mims' "This Is Why I'm Hot" long
before it became a big hit, Thomas said.
" We
try to see which artist is going to break," he
said.
The
Miz averages about 500,000 Web site hits per month,
with regular listeners from many countries, including
the Netherlands, Saudi Arabia and China, Thomas
said. It broadcasts all types of music with a hip-hop
focus, including live shows by DJs such as Jack
Frost and Boosto.
" It's
a diversity you can't get on terrestrial radio,
which is controlled by a few companies," Thomas
said.
Thomas
and Lam are among the many Internet broadcasters
who joined up with savenetradio.org,
an organization fighting the rate increase. Many
of them took part in a day of silence last month
during which broadcasts were halted for 24 hours.
Thomas also took part in a Washington, D.C., protest
walk in May.
" If
this goes through, I kind of think Internet radio
will go black market, it will go underground," he
said. "It'll bankrupt us, but I'll figure
out a way to podcast this or something.
" I'm
not going anywhere - it took too long to build
this."
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