RIAA, through SoundExchange, is lying to webcasters

The RIAA and its goonsquad, SoundExchange, is working very hard to destroy internet radio, by forcing webcasters to pay royalties that will run from 60%-300% of their annual revenue. For context, satellite radio pays 5%-7%, and over-the-air broadcasters pay nothing.

Why is the RIAA trying so hard to destroy Internet Radio? I wrote in a Geek in Review a while ago:

Because the
RIAA (which is essentially the major labels) has spent a lot of time
and a lot of money building a monopoly with a few media conglomerates,
and it’s been very profitable for them all for decades. 

This effort to wipe out independent online radio has nothing to do with
protecting artists, and everything to do with protecting a status quo
that supports a very few top 40 acts at the expense of everyone else.
In their effort to protect their outdated business model and insanely
corrupt relationship with a few broadcasters, the RIAA is happy to
prevent their artists from having a magnificent way to reach potential
customers who will buy albums, merchandise, and concert tickets.

I am rather worked up about this because I believe it’s about choice.
The airwaves in the United States are supposedly
owned by the American people, and licensed out to broadcasters for use, but in practice, that’s not the way it works at all. In practice, the airwaves are owned by Clear Channel, and they work hand-in-hand with the big four record labels to limit our choice of music. It’s a great scam they’ve got going, and it’s been a very profitable system for all of them for a very long time.

For the rest of us, though, this system sucks. For guys like me who can’t stand top 40 music, who can’t stand the utter crap they play on KROQ these days, and who want some fucking variety in their music, we’re screwed . . .

. . .with the notable exception of Internet radio, where we have choices as diverse as Radio Paradise, WFMU, Groove Salad, and Indie Pop Rocks.

Indie webcasters like SomaFM have been working tirelessly with the Save Net Radio Coalition
to educate our representatives in congress so that legislation can be
passed which would make it possible for these indie broadcasters to
stay in business. The RIAA doesn’t like this, so they’re trying to fight it, but in a surprisingly competent move, Congress is forcing RIAA and its goonsquad SoundExchange to negotiate realistic and fair royalty rates with webcasters.

That brings us more or less up to today, where we discover that the RIAA is getting desperate, and doesn’t like that it can’t get its way simply by threatening a lot of people and paying off a lot of congressmen.

Rusty Hodge, the GM of SomaFM, has been in DC for a couple of months, working like crazy to save his business and an entire industry. He’s been blogging about his experiences, sharing the little victories and big frustrations during the fight.

The RIAA must be afraid of Rusty and everyone who is working to save internet radio, because they’ve now resorted to outright lying to webcasters, in their latest efforts to threaten and scare them:

RIAA has SoundExchange issue press release to try and trick congress
into thinking the royalty situation has been solved. Nice work guys.

The reason many people are signing is because they fear lawsuits
from the RIAA. RIAA representatives have been calling webcasters and
telling them if they didn’t sign by Sep 15th, they would be operating
in violation of the law. That’s the only reason they signed.  It’s like a Sporano’s episode.

The only way that webcasters can escape the high royalty rates is by signing this current agreement and only
playing SX affiliated label music. This means less independent music,
and more big label music. Which is exactly what the RIAA wanted.

The press release Rusty is referring to is reprinted in his blog, but here’s the short version: 24 webcasters signed an agreement with SoundExchange that gives them slightly-better royalty rates now, but expires in three years, putting them right back where they are today. If SoundExchange can scare enough indie webcasters into signing this horrible agreement, the RIAA will be able to go to congress and tell them that they really don’t need to pass the Internet Radio Equality Act, which would permanently save internet radio by preventing the RIAA and SoundExchange from jacking up royalty rates so high, it would force indie webcasters out of business.

And this "deal" is actually a giant load of bullshit. According to Wired’s Listening Post:

However, the agreement only covers artists and labels who are
SoundExchange members.  Webcasters who sign the agreement but still
want to play music from other bands would have to pay SoundExchange the
higher per-song rates originally specified
by the CRB for those songs, because that music is not part of the
deal. In essence, small webcasters who sign have an economic incentive
to avoid lesser-known music.

So that’s what this is all about: stopping lesser-known music from even having a chance at finding an audience. The RIAA’s major members — Universal, Warner, Sony BMG, and EMI —  are trying to put indie webcasters out of business. They’re not working to protect artists. They’re working to protect their monopoly, and now they’re lying to do it.

27 thoughts on “RIAA, through SoundExchange, is lying to webcasters”

  1. My favorite Internet radio station moved to Canada for just this reason. They actually picked-up and moved all of their servers to Canada. Will that protect them? Who knows? They seem to think so.

  2. As someone who doesn’t listen to much music that was produced after 1980, I can honestly say I don’t have any personal (as in “they are taking away my music”) interest in this fight. However, as someone who believes that art should not be controlled by anyone (let alone moneyed interests),I think Wil’s Sopranos reference is dead on. This deal is pure extortion, the only thing missing is the horse head in the bed.
    The RIAA is doing its best to try to control a dwindling customer base, and failing. They may yet kill off Web Radio as we know it. However, what happens if you get indie only web radio services? What happens if the music THEY own isn’t played anywhere (outside of AM/FM crap radio) anymore? That’s a question the RIAA should be asking itself. Alienating your customer base is never a good business strategy.

  3. RIAA: Nooooo they be takin away mah muneez!!!
    People: Plz to be shutting up nao.
    Seriously, I hope Congress or somebody nails these guys. DOWNLOAD METALLICA!!!!!!

  4. Wil,
    Do you have any ideas about what can be done to shake off the apathy of people who see this kind of thing and STILL SAY “but what can I do”?
    Any ideas how to make people lobby, vote, buy or otherwise do what needs doing to tip the balance? Because if those people could be made to see A) how many of them there are and B) that their numbers will matter, together, this would be a lot easier.
    So. Your thoughts?

  5. As a musician who isn’t part of the whole major label process, this RIAA business really pisses in my Corn Flakes. I can’t stand people telling me what I can watch or listen to, and that’s what this amounts to. RIAA can piss off.

  6. What a right mess; time to go back to sending emails and making phone calls, I s’pose.
    If I can, I’ll throw in a mention of KCRW, though. Whether you’re in the L.A.-area (89.9fm) or not (kcrw.com) they’ve got fantastic music programs and a dedicated music-only channel online if that’s all you want.

  7. Wil Wheaton: RIAA, through SoundExchange, is lying to webcasters

    Wil Wheaton, author, voiceover actor, actor, wrote today in RIAA, through SoundExchange, is lying to webcasters about Sound Exchange issuing a press release that 24 webcasters took them up on their deal. Its a good article, with lots of good lin…

  8. Wil,
    while I wholeheartedly support your crusade against ClearChannel and the protection of our airwaves, I have a hard time squaring that with your love (often posted here and on the old WWdN) of XM Satellite Radio? How can you love XM as much as you do when it is as supported and controlled by ClearChannel as it is?
    This is a large part of why I chose (and continue to choose) Sirius over XM for my Satellite needs. This is in addition to the better programming (both music and non) and the greater flexibility of on-the-air opinions and play choices exercised by Sirius DJs.
    Your comments on this seeming contradiction (ie, how can you fight the man when you’re the one paying to keep the man in power) would be appreciated.

  9. It nearly boggles the mind to think of the strangle-hold that the United States has on the Internet.
    The assumption that either the RIAA or the U.S. Congress should have a say on what anyone ‘broadcasts’ on the Internet is truly an American hubris.
    Thanks for pointing out the latest machinations of Clear Channel and the RIAA. Anything and everything in pursuit of the almighty dollar – and the artists themselves be damned.

  10. You know I can’t see where this isn’t a simple case of Freedom of Speech, like call me naive, but if they were trying to censor the content of an on-line news item of God-forbid a Blog then this would get huge publicity. On-line music providing there’s no copyright issues which with independent music is rare, should be allowed the freedom of speech even if that speech is in the form of someone else singing, however like I said maybe I’m just being naive.

  11. I’m might talking out of my arse, but I think that all radio stations in the UK have to pay royalties for every track they play. Music tv channels pay for ever video they show.
    I think royalties for promoting other people’s products sucks big time, but if they do it on TV and radio, why not on the internet. – you can at least see the logic behind it (in their eyes)
    narrow minded, as the more they charge, they less the actually get in return.

  12. dotsara mentioned L.A.’s KCRW (which is great), there is also WXPN(.com) from the University of Pennsylvania in Philly. They have their own station online, as well as three other internet stations.
    Thanks for bringing this to my (and other’s) attention.
    Power to the people, Wil!

  13. I’m literally angry with rage! The RIAA is rearranging chairs on the Titanic. They exist as a distribution channel, and now that they’re becoming redundant, they are fighting progress through graft and intimidation.
    Central OH is blessed with the joy of independent radio in CD101. In addition to playing a fairly diverse selection of alternative rock, having specialty shows like Independent Playground that play indie stuff, and hosting the awesome Big Room where bands play a few songs live before they play shows in the Columbus area, CD101 is also owned by local interests. They’re a big part of the local culture. They work to sponsor ComFest, numerous shows, and the Andyman-a-thon, where one of the hosts broadcasts for 48 hours straight for charity. And they even run a feed over the tubes at CD101.com.

  14. I’ve been reading on this topic for a while now, and I wholeheartedly agree with you. It’s not fair to up and coming artists of any genre that their music isn’t streaming online with the A-List of music companies. I have friends who are trying to get places with their bands, and I would hate to see the RIAA ruin their chances of their music getting out there.

  15. Wil:
    I have an attorney working on language that will grant automatic licenses to webcasters upon publication of my music. I’m not an SX member, nor am I an RIAA member, and I’ll be damned if they can make money should a webcaster play one of my songs instead of one of theirs. (Not a real problem at the moment but we have albums coming to iTunes in November – end shameless plug) I plan to post the language for this on my own website for anyone to use once it’s ready.

  16. Im wanting to double check this and see if I am reading and understanding some of the Sound Exchange terms and info (aka BullShit)
    1. In the “Deal” only registered artist played songs get a lower rate
    2. Sound Exchange collects for ALL artist played registered or not.
    If I am the Indie artist played and not registered, Sound Exchange collects a higher fee.
    If I understand this correctly then who has authorized Sound Exchange to collect fees on MY WORKS?

  17. Wil, while the message of this post is dead-on, two details confuse me. One: Do OTA radio stations really not pay royalties? That seems pretty absurd, and really out-of-character for the RIAA — I always thought radio play was a big part of the way major-label musicians make money. This might be worth doublechecking.
    And two: If an internet station is playing music that’s not from members of SoundExchange, why would they be paying royalties to SoundExchange at all? What am I missing here?
    Yours in rock,
    -j.

  18. The more I learn about the RIAA, the more I despise them and their heavy-handed tactics bordering on the unethical and even illegal. Many of the online music broadcasters (some simulcasters, some internet-only) I’ve enjoyed listening to like KBON, KKCR, HOOAH!!! Radio and others have either gone silent or restricted their streaming. There are a few like Whole Wheat Radio that feature independent artists that give direct permission to play their music. So far the RIAA and SoundExchange haven’t intimidated them. I made sure to put an entry concerning your article on the topic (complete with links) on my blog. I’m not a big blog with a lot of readership but I hope it might help spread the word.

  19. Vampires and the RIAA
    Ever notice how vampires operate? They suck your blood all the while making you think that they are doing you the favor.
    It really does appear that the RIAA and its net representative, Sound Exchange, operate under the same principle.
    The RIAA has the Copyright Royalty Board under its thumb and appears to dictate web policy to that board, the RIAA tells webcasters what they will pay or else they go to jail or get sued. This seems to be coercion to me.
    So, in effect, the RIAA sets royalty payments unilaterally, sucks the funds from the webcasters and makes them think that the RIAA did them the favor.
    If the RIAA had its way, there’d be no webcasting at all. Each note of music would have to be bought from one of the RIAA’s constituent members. No more free music of any kind, no more fair use would exist, nothing without payment. Pay through the nose, then give up your nose.
    One thing that webcasters forget as victims of this policy, they could put a stop to it fast. Just stop webcasting music. When the public starts complaining to Congress to do something about it, perhaps the RIAA can be controlled by reason and not avarice.
    Victimizers often forget that if they destroy the victim, their victimization ceases and they have no source left from which to suck.
    Unfortunately, the so-called musical performance artists contribute to this victimization by profiting from the RIAA’s activities, whether vicariously or otherwise. You can’t take your profits with a clear conscience when the agency collecting for you is known to be set on destroying the source of those profits.
    Musicians can create music without an audience, but do they really want that?
    Just some thoughts.
    BRIAN LEE CORBER, [email protected], Panorama City, California

  20. Vampires and the RIAA
    Ever notice how vampires operate? They suck your blood all the while making you think that they are doing you the favor.
    It really does appear that the RIAA and its net representative, Sound Exchange, operate under the same principle.
    The RIAA has the Copyright Royalty Board under its thumb and appears to dictate web policy to that board, the RIAA tells webcasters what they will pay or else they go to jail or get sued. This seems to be coercion to me.
    So, in effect, the RIAA sets royalty payments unilaterally, sucks the funds from the webcasters and makes them think that the RIAA did them the favor.
    If the RIAA had its way, there’d be no webcasting at all. Each note of music would have to be bought from one of the RIAA’s constituent members. No more free music of any kind, no more fair use would exist, nothing without payment. Pay through the nose, then give up your nose.
    One thing that webcasters forget as victims of this policy, they could put a stop to it fast. Just stop webcasting music. When the public starts complaining to Congress to do something about it, perhaps the RIAA can be controlled by reason and not avarice.
    Victimizers often forget that if they destroy the victim, their victimization ceases and they have no source left from which to suck.
    Unfortunately, the so-called musical performance artists contribute to this victimization by profiting from the RIAA’s activities, whether vicariously or otherwise. You can’t take your profits with a clear conscience when the agency collecting for you is known to be set on destroying the source of those profits.
    Musicians can create music without an audience, but do they really want that?
    Just some thoughts.
    BRIAN LEE CORBER, [email protected], Panorama City, California

  21. Nice explanation on the issues. I can only hope more folk take the time to understand the issues rather than blinding trusting corporate goons.
    On other news, you may like the 1,000 words this pic spells out:
    Front page of the Washington Times
    From ‘In Case You Were Wondering Who the Rev. Moon is Supporting’ on Roxy Populi’s blog
    Talk about some angelic vs. demonic imagery.
    I’m stunned. All I can say is, wow. Just. Wow.
    Before the blog posting of that still astounding cover, and before Google search results leading to The Dark Side of the Moon, I did not know who Rev. Moon was.
    I know I’m behind in keeping up with who owns whom or what, and I should pay more attention to what opinion or “fact” is being spewed or manipulated by which fingers and whose mouth.
    I knew China owns, what is it now? something like 1 trillion dollars in US bonds. I know we are headed to trouble on many many fronts in our government. But I am wholly surprised to see that a paper is controlled by the Korean-based Unification Church. It makes me wonder how many other publications and texts and presumed sources of knowledge are owned by foreign companies and individuals, and how many of those are twisting perspectives and stories for anti-American goals.
    Can it be that everything can be sold and everyone can be bought? Does all it take is a presumed trustworthy source?

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