Goodbye to the music industry … maybe

Well, more accurately, goodbye to internet radio stations who play music. Most of the small time radio stations (and even most of the big ones, my friends who work at such tell me) won’t be able to make ends meet with the new fees.

So, why do I say goodbye to the music industry? Because how do kids find out about new music? On the Internet. Where on the Internet? Radio stations. Well, when they aren’t stealing music or borrowing their friends iPods that is.

Anyway, I’m not sure where to go with this. It’ll keep smaller musicians from getting found, too, because internet radio stations have to pay the new fees even if they only play small, indie style, music.

I’m bummed by this, especially since I have friends who work at Pandora and other Internet radio stations.

UPDATE: Wired says that the new fee structure won’t be put into place by SoundExchange. Ahh, this story just keeps moving. To understand this issue, you might go back and watch the interview I did with Tom Conrad, Pandora’s CTO.

Comments

  1. I love Pandora. I have told so many of my family and friends about it. They are always amazed by it and many have become hooked. I have honestly purchased a lot of music that I discovered through that medium and know some others who have as well. This is really sad.

  2. I love Pandora. I have told so many of my family and friends about it. They are always amazed by it and many have become hooked. I have honestly purchased a lot of music that I discovered through that medium and know some others who have as well. This is really sad.

  3. Yes! Somebody think of the children!

    Actually, though advocates keep claiming this is all about small operations, Yahoo and other giants would benefit most from lower fees. They don’t need charity.

  4. Yes! Somebody think of the children!

    Actually, though advocates keep claiming this is all about small operations, Yahoo and other giants would benefit most from lower fees. They don’t need charity.

  5. i still think the folks at http://podbop.org/ created a great way to discover music. They won top prize at mashup camp last year. Their service mashes up concert info on eventful db and user contributed links to public mp3s to create a city-focused podcast you can subscribe to.

  6. i still think the folks at http://podbop.org/ created a great way to discover music. They won top prize at mashup camp last year. Their service mashes up concert info on eventful db and user contributed links to public mp3s to create a city-focused podcast you can subscribe to.

  7. Podesta: I disagree. Yahoo is a business and will cut off divisions that are bleeding money unless they can see a business reason to do so. When it comes to music I can’t see it.

  8. Podesta: I disagree. Yahoo is a business and will cut off divisions that are bleeding money unless they can see a business reason to do so. When it comes to music I can’t see it.

  9. Aren’t kids going to find out about music through myspace? I mean, I know Facebook is the valley favorite, but myspace has an easy feature that allows users to click and have a song playing on their page. That song comes from the artist’s myspace page, so I’m thinking there’s no issue there. Artists are allowing that use on myspace.

  10. Aren’t kids going to find out about music through myspace? I mean, I know Facebook is the valley favorite, but myspace has an easy feature that allows users to click and have a song playing on their page. That song comes from the artist’s myspace page, so I’m thinking there’s no issue there. Artists are allowing that use on myspace.

  11. Preston is right…kids find out about new music more often than not via myspace, not internet radio stations.

  12. Preston is right…kids find out about new music more often than not via myspace, not internet radio stations.

  13. Very unfortunate. I never ever listened to the radio before. I wanted to be in complete control of what I wanted to hear. But when I discovered Pandora I instantly fell in love with it.

    Needless to say, since I live in Sweden, a couple of months ago I wasn’t allowed to listen anymore.

    I’ve been trying out LastFM but really haven’t found it’s charm. But maybe that’s because I don’t have a sponsor account yet?

    However, very unfortunate. Although all the brilliant geeks will probably come up with some kind of solution or new system.

  14. Very unfortunate. I never ever listened to the radio before. I wanted to be in complete control of what I wanted to hear. But when I discovered Pandora I instantly fell in love with it.

    Needless to say, since I live in Sweden, a couple of months ago I wasn’t allowed to listen anymore.

    I’ve been trying out LastFM but really haven’t found it’s charm. But maybe that’s because I don’t have a sponsor account yet?

    However, very unfortunate. Although all the brilliant geeks will probably come up with some kind of solution or new system.

  15. First, Robert, your observations are astute, as ever.

    And, this is clearly the ‘wild west’ in terms of rights, enabling technologies and social norms in the Webasphere.

    The innovation that leads to our ability to digitize music, share, and discover it only continues to get better. By creating technology that allows people (all of us) find, listen to, discover and share can’t be wrong.

    The real question lies in how this is monetized.

    The labels are on notice, and that’s not bad. Its what WE (the royal and collective WE) do with the window to transform the model is where it gets interesting.

    In general, its true; the ‘kids’ find music wherever its easily and readily available to them. They are totally unconcerned with where, and how Web 2, or legal it is. This should be a good indicator.

    I am one of those kids, yet, I am 37 years old, and hopeful that we will all stop polarizing ourselves and get real that it is all about exposure. This has always been true. Its simply that the vehicle by which we find the exposure has shifted.

    -LaurieAnne

  16. First, Robert, your observations are astute, as ever.

    And, this is clearly the ‘wild west’ in terms of rights, enabling technologies and social norms in the Webasphere.

    The innovation that leads to our ability to digitize music, share, and discover it only continues to get better. By creating technology that allows people (all of us) find, listen to, discover and share can’t be wrong.

    The real question lies in how this is monetized.

    The labels are on notice, and that’s not bad. Its what WE (the royal and collective WE) do with the window to transform the model is where it gets interesting.

    In general, its true; the ‘kids’ find music wherever its easily and readily available to them. They are totally unconcerned with where, and how Web 2, or legal it is. This should be a good indicator.

    I am one of those kids, yet, I am 37 years old, and hopeful that we will all stop polarizing ourselves and get real that it is all about exposure. This has always been true. Its simply that the vehicle by which we find the exposure has shifted.

    -LaurieAnne

  17. Having once upon an age worked at the counter of a record store, slinging CDs to people, I can’t say I’m overly surprised at the state of the music industry at this point — they didn’t get it back when MP3 wasn’t even a glimmer in the eyes of The Kids(tm) and they certainly don’t get it now. I’m still a package fetishist, which means no matter how digital the record labels go (and it’s certainly a good idea) I’ll always want the artifact in my hand. The problem is that the music industry has little interest in giving people what they want. How else can you explain the elimination of the single as a physical entity just as the industry was again pushing towards a singles-based mode of operation? (When your choice is a full album packed with filler for $12.99 vs a single for $10.99, you might choose to skip both and simply steal the single on P2P no matter how much you think the artist should get paid for their efforts.)

    At any rate, this is just the latest example of the industry not getting it — rather than accepting that this maybe might just possibly be actual PROMOTION for their piddly little acts, they’re shutting it down. So when the big labels finally collapse under their own weight, I won’t actually feel bad about it.

  18. Having once upon an age worked at the counter of a record store, slinging CDs to people, I can’t say I’m overly surprised at the state of the music industry at this point — they didn’t get it back when MP3 wasn’t even a glimmer in the eyes of The Kids(tm) and they certainly don’t get it now. I’m still a package fetishist, which means no matter how digital the record labels go (and it’s certainly a good idea) I’ll always want the artifact in my hand. The problem is that the music industry has little interest in giving people what they want. How else can you explain the elimination of the single as a physical entity just as the industry was again pushing towards a singles-based mode of operation? (When your choice is a full album packed with filler for $12.99 vs a single for $10.99, you might choose to skip both and simply steal the single on P2P no matter how much you think the artist should get paid for their efforts.)

    At any rate, this is just the latest example of the industry not getting it — rather than accepting that this maybe might just possibly be actual PROMOTION for their piddly little acts, they’re shutting it down. So when the big labels finally collapse under their own weight, I won’t actually feel bad about it.

  19. Robert, I think they’re talking about bands that put their music up on MySpace. When you do that you’re giving MySpace not only the right to have the music up there, but it used to be that you were also giving them future rights to the music as well. I haven’t checked lately to see if that clause is still in the user agreement, but it used to be there.

  20. Robert, I think they’re talking about bands that put their music up on MySpace. When you do that you’re giving MySpace not only the right to have the music up there, but it used to be that you were also giving them future rights to the music as well. I haven’t checked lately to see if that clause is still in the user agreement, but it used to be there.

  21. Mr. Scoble, where are you getting this MySpace issue from? They’re not a radio station and these are very specific fees as they’re being presented everywhere I see.

    We’d of heard from Murdoch and those MySpace founders by now as well as online tv folks and all sorts of people not labeled radio and not being heard from.

    Evidence on this one is on you homie.

  22. Mr. Scoble, where are you getting this MySpace issue from? They’re not a radio station and these are very specific fees as they’re being presented everywhere I see.

    We’d of heard from Murdoch and those MySpace founders by now as well as online tv folks and all sorts of people not labeled radio and not being heard from.

    Evidence on this one is on you homie.

  23. I got it from Tom at Pandora. When music is played in full on the Internet the Internet Radio rules apply.

    If that doesn’t apply to MySpace I wanna hear why it doesn’t.

  24. I got it from Tom at Pandora. When music is played in full on the Internet the Internet Radio rules apply.

    If that doesn’t apply to MySpace I wanna hear why it doesn’t.

  25. Adam Curry said a week or two ago that it definitely won’t apply to the podsafe music network (and other podsafe sources). The new fee can be waived by prior arrangement with the artist – i.e. the agreement the artist must accept before posting their music. Myspace can do the same thing (if they haven’t already).

    I haven’t listened to the radio in nearly 3 years myself. I discover all of my new music from podcasts, there are occasional gems in the mainstream industry but for my money the best music is coming from independant artists via podcasts.

  26. Adam Curry said a week or two ago that it definitely won’t apply to the podsafe music network (and other podsafe sources). The new fee can be waived by prior arrangement with the artist – i.e. the agreement the artist must accept before posting their music. Myspace can do the same thing (if they haven’t already).

    I haven’t listened to the radio in nearly 3 years myself. I discover all of my new music from podcasts, there are occasional gems in the mainstream industry but for my money the best music is coming from independant artists via podcasts.

  27. Yep, this is for internet streaming of artists registered with SoundExchange t all *IN THE USA* SO internet radio in the UK (for example) isn’t affected unless they have significant US presence – UK streaming licencning gives you a 2% leeway of foregin plays before you have to pay the foreign countries.

    It also doesn; touch you if you have prior agreement with the artists, so Ioda Promonet, Podsafe Audio, Adam’s PMN, Magnatune, all of those sources and more are still cool with podcsting the music.

    And given I play three shows every week of new music (http://rock.thepodcastnetwork.com/ for the blatant plug) I think that if people look for music (as opposed to look at the sky being pushed down by the ‘big evil labels in the US’) they’ll find a very healthy scene of playing,listening, discovery and recompense.

  28. Yep, this is for internet streaming of artists registered with SoundExchange t all *IN THE USA* SO internet radio in the UK (for example) isn’t affected unless they have significant US presence – UK streaming licencning gives you a 2% leeway of foregin plays before you have to pay the foreign countries.

    It also doesn; touch you if you have prior agreement with the artists, so Ioda Promonet, Podsafe Audio, Adam’s PMN, Magnatune, all of those sources and more are still cool with podcsting the music.

    And given I play three shows every week of new music (http://rock.thepodcastnetwork.com/ for the blatant plug) I think that if people look for music (as opposed to look at the sky being pushed down by the ‘big evil labels in the US’) they’ll find a very healthy scene of playing,listening, discovery and recompense.

  29. [The following got a bit disjointed but what’s striking me is that if you’re correct and MySpace didn’t go to the hearings, that’s big news and the tech press should be badgering them about it, IMHO.]

    “I got it from Tom at Pandora. When music is played in full on the Internet the Internet Radio rules apply”

    I don’t know about that but maybe you should ask Tom about MySpace. I’m looking at legal documents and current coverage and the issue seems to come down to how “webcaster” is defined. Ask Tom about that if it matters to you but the language and arguments you’re presenting do not appear to address the legal terminology.

    The issue I’m finding at the moment is how “webcaster” is defined legally. I’ve been looking at the recent legislation and coverage and nobody defines webcaster or webcasting. At this point they’re all discussing the fact that “small webcaster” hasn’t been defined.

    I’m not a legal researcher and my interactions with lawyers have convinced me not to define legal terms using my own logic. I assume the term webcaster was clarified at an earlier date but I haven’t found a legal definition yet.

    I also did not encounter the phrase “Internet Radio rules” in my investigation of legal documents.

    However, in various sources outside of the current discussion, I’m finding webcasting referring to both audio and video streaming and this discussion hasn’t been applied to video, from what I’ve encountered.

    Why only radio stations, on or offline have been involved, has to do with something that you, me and Tom are missing.

    If you’re right about MySpace. One of the big stories here is that they’ve been silent and that’s really stupid. I’d suggest you start investigating that angle since you seem fairly certain about the implications for MySpace and all sorts of other entities that did not weight in on this issue. Where were they and don’t they owe their shareholders some concern, if you’re correct?

    I hope by later today someone who can direct us to the correct legal documents will emerge cause so far all I’m hearing in relationship to your concerns are interpretations from nonlegal sources as to who this actually affects.

    I look forward to finding out what these guys are actually talking about.

  30. [The following got a bit disjointed but what’s striking me is that if you’re correct and MySpace didn’t go to the hearings, that’s big news and the tech press should be badgering them about it, IMHO.]

    “I got it from Tom at Pandora. When music is played in full on the Internet the Internet Radio rules apply”

    I don’t know about that but maybe you should ask Tom about MySpace. I’m looking at legal documents and current coverage and the issue seems to come down to how “webcaster” is defined. Ask Tom about that if it matters to you but the language and arguments you’re presenting do not appear to address the legal terminology.

    The issue I’m finding at the moment is how “webcaster” is defined legally. I’ve been looking at the recent legislation and coverage and nobody defines webcaster or webcasting. At this point they’re all discussing the fact that “small webcaster” hasn’t been defined.

    I’m not a legal researcher and my interactions with lawyers have convinced me not to define legal terms using my own logic. I assume the term webcaster was clarified at an earlier date but I haven’t found a legal definition yet.

    I also did not encounter the phrase “Internet Radio rules” in my investigation of legal documents.

    However, in various sources outside of the current discussion, I’m finding webcasting referring to both audio and video streaming and this discussion hasn’t been applied to video, from what I’ve encountered.

    Why only radio stations, on or offline have been involved, has to do with something that you, me and Tom are missing.

    If you’re right about MySpace. One of the big stories here is that they’ve been silent and that’s really stupid. I’d suggest you start investigating that angle since you seem fairly certain about the implications for MySpace and all sorts of other entities that did not weight in on this issue. Where were they and don’t they owe their shareholders some concern, if you’re correct?

    I hope by later today someone who can direct us to the correct legal documents will emerge cause so far all I’m hearing in relationship to your concerns are interpretations from nonlegal sources as to who this actually affects.

    I look forward to finding out what these guys are actually talking about.

  31. “I also did not encounter the phrase “Internet Radio rules” in my investigation of legal documents.”

    My bad, I was spacing out on that one but I can’t find the text of the Internet Radio Equality Act and, until we can find a legal definition of “internet radio”, I’m not sure we’ve moved forward.

  32. “I also did not encounter the phrase “Internet Radio rules” in my investigation of legal documents.”

    My bad, I was spacing out on that one but I can’t find the text of the Internet Radio Equality Act and, until we can find a legal definition of “internet radio”, I’m not sure we’ve moved forward.

  33. Here’s how Sound Exchange defines “Commercial Webcaster/Broadcast Simulcasters”:

    http://www.soundexchange.com/licensee/licensee_cws.html

    “A “commercial webcaster/broadcast simulcaster” is a noninteractive, nonsubscription digital audio transmission service that provides audio programming consisting, in whole or in part, of performances of sound recordings, including retransmissions of broadcast transmissions. The primary purpose of the service must be to provide audio or other entertainment programming and not to sell, advertise, or promote particular products or services other than sound recordings, live concerts, or other music-related events. To be “noninteractive,” a service may not offer “on-demand” access to individual sound recordings or offer programs that are “specially created for the recipient.” Playing requests does not make a service interactive provided that the service does not substantially consist of sound recordings that are performed within one hour of the time they are requested or at a designated time.”

    There isn’t another category that would fit MySpace [check the left hand column of the page linked above]. My best non-lawyer thinking says that MySpace would be considered interactive and also would not fit the “primary purpose” aspect though I can see how that the primary purpose aspect could be argued differently.

    This seems a bit closer to resolving the MySpace discussion than anything else I’ve seen.

    Sleep is now in order.

    Peace

  34. Here’s how Sound Exchange defines “Commercial Webcaster/Broadcast Simulcasters”:

    http://www.soundexchange.com/licensee/licensee_cws.html

    “A “commercial webcaster/broadcast simulcaster” is a noninteractive, nonsubscription digital audio transmission service that provides audio programming consisting, in whole or in part, of performances of sound recordings, including retransmissions of broadcast transmissions. The primary purpose of the service must be to provide audio or other entertainment programming and not to sell, advertise, or promote particular products or services other than sound recordings, live concerts, or other music-related events. To be “noninteractive,” a service may not offer “on-demand” access to individual sound recordings or offer programs that are “specially created for the recipient.” Playing requests does not make a service interactive provided that the service does not substantially consist of sound recordings that are performed within one hour of the time they are requested or at a designated time.”

    There isn’t another category that would fit MySpace [check the left hand column of the page linked above]. My best non-lawyer thinking says that MySpace would be considered interactive and also would not fit the “primary purpose” aspect though I can see how that the primary purpose aspect could be argued differently.

    This seems a bit closer to resolving the MySpace discussion than anything else I’ve seen.

    Sleep is now in order.

    Peace

  35. I think the music industry is pathologically not capable to find the ‘silver lining’ in the dramatic technological changes occurred in the last 10 years. They try to stick to old distribution models, built on controlled environment. I don’t think our society will sacrifice its speed in technological development in order to keep a single or two industries satisfied with their voracious appetite for profits.

  36. I think the music industry is pathologically not capable to find the ‘silver lining’ in the dramatic technological changes occurred in the last 10 years. They try to stick to old distribution models, built on controlled environment. I don’t think our society will sacrifice its speed in technological development in order to keep a single or two industries satisfied with their voracious appetite for profits.

  37. Where will kids find new music? Myspace. Thats where. Bands are interacting directly with and developing their fan bases on MySpace for a while. MySpace is uniquely positioned in this regard. If Facebook is the ultimate “social” social network, and YouTube is the video social network, MySpace is the Music social network. The bands are choosing to publish their own music there, which falls outside of other licensing and distribution agreements–especially for unsigned bands. The thing that really sucks is that MySpace is the most ill conceived and closed social network of all.

  38. Where will kids find new music? Myspace. Thats where. Bands are interacting directly with and developing their fan bases on MySpace for a while. MySpace is uniquely positioned in this regard. If Facebook is the ultimate “social” social network, and YouTube is the video social network, MySpace is the Music social network. The bands are choosing to publish their own music there, which falls outside of other licensing and distribution agreements–especially for unsigned bands. The thing that really sucks is that MySpace is the most ill conceived and closed social network of all.

  39. I think it’s a death knell for the megabands. The smaller artists (that I have worked with/promoted) seem to have their stuff together with regard to online presence.

    I think pandora’s loss will be my biggest shock to the system. I have found dozens of new artists there

  40. I think it’s a death knell for the megabands. The smaller artists (that I have worked with/promoted) seem to have their stuff together with regard to online presence.

    I think pandora’s loss will be my biggest shock to the system. I have found dozens of new artists there

  41. http://news.com.com/8301-10784_3-9743304-7.html

    “The new rules (PDF) issued by the U.S. Copyright Royalty Board earlier this year prescribe rate hikes of 0.08 cent per song per listener retroactive to 2006.”

    This is my only problem with the ruling. It’s retroactive, meaning that the stations did not know what the fee was ahead of time.

    If they are told, you must pay x amount to broadcast y media. Take it or leave it. That’s one thing, but to be billed retroactively is horrible.
    Perhaps those internet radio stations would have chosen to stop broadcasting and done something else instead had they known about the fees. I think that’s extremely unfair.

    BTW, I know a lot of people here reading Scoble’s blog are out of work hopefuls. If anyone from Seattle or SF is reading through that regularly attends tech conferences such as Gnomedex are reading through, contact me immediately. I have paying work for you.

  42. http://news.com.com/8301-10784_3-9743304-7.html

    “The new rules (PDF) issued by the U.S. Copyright Royalty Board earlier this year prescribe rate hikes of 0.08 cent per song per listener retroactive to 2006.”

    This is my only problem with the ruling. It’s retroactive, meaning that the stations did not know what the fee was ahead of time.

    If they are told, you must pay x amount to broadcast y media. Take it or leave it. That’s one thing, but to be billed retroactively is horrible.
    Perhaps those internet radio stations would have chosen to stop broadcasting and done something else instead had they known about the fees. I think that’s extremely unfair.

    BTW, I know a lot of people here reading Scoble’s blog are out of work hopefuls. If anyone from Seattle or SF is reading through that regularly attends tech conferences such as Gnomedex are reading through, contact me immediately. I have paying work for you.

  43. No matter how many fees are instituted, artists in the digital age will find a way to bypass them and get their music to new audiences. Digital technology has always managed to stay ahead of the laws that govern it, and every time the law catches up, there’s a new innovation. The market will find a way.

    http://mikeelliottsblog.wordpress.com

  44. No matter how many fees are instituted, artists in the digital age will find a way to bypass them and get their music to new audiences. Digital technology has always managed to stay ahead of the laws that govern it, and every time the law catches up, there’s a new innovation. The market will find a way.

    http://mikeelliottsblog.wordpress.com

  45. “No matter how many fees are instituted, artists in the digital age will find a way to bypass them and get their music to new audiences.”

    Mike, in all fairness, these artists signed a contract with the record company saying that they would license their music in exchange for money.

    If an artist really wanted to distribute their music for free, all they have to do is open a myspace page or other band network and upload their tracks in full.

    http://www.archive.org/details/audio
    Ever heard of Archive.org and publicly licensed music?

    This isn’t about sharing music, this is about collecting money for non-free music. I hate the RIAA as much as the next guy, but saying that the RIAA is stopping these poor artists with olympic size swimming pools from reaching new audiences with this fee is plainly wrong. This fee is a way for them to exact control over distribution channels.

  46. “No matter how many fees are instituted, artists in the digital age will find a way to bypass them and get their music to new audiences.”

    Mike, in all fairness, these artists signed a contract with the record company saying that they would license their music in exchange for money.

    If an artist really wanted to distribute their music for free, all they have to do is open a myspace page or other band network and upload their tracks in full.

    http://www.archive.org/details/audio
    Ever heard of Archive.org and publicly licensed music?

    This isn’t about sharing music, this is about collecting money for non-free music. I hate the RIAA as much as the next guy, but saying that the RIAA is stopping these poor artists with olympic size swimming pools from reaching new audiences with this fee is plainly wrong. This fee is a way for them to exact control over distribution channels.

  47. I called by my congressmen and my representative to see if they could do something about this. I was told by Chris Dodd’s office that the Senate is tied up with the Department of Defense bill. The clock is ticking….

  48. I called by my congressmen and my representative to see if they could do something about this. I was told by Chris Dodd’s office that the Senate is tied up with the Department of Defense bill. The clock is ticking….

  49. “If that doesn’t apply to MySpace I wanna hear why it doesn’t.”

    Because the music on MySpace is distibuted through direct license from the artists, just like the Podsafe music network, and as if you were to make your own direct license agreement with an artist to use their music on your podcast.

  50. “If that doesn’t apply to MySpace I wanna hear why it doesn’t.”

    Because the music on MySpace is distibuted through direct license from the artists, just like the Podsafe music network, and as if you were to make your own direct license agreement with an artist to use their music on your podcast.

  51. Anything that helps to push the big recording industry players into the grave quicker can’t be totally bad.

    It’s time to move to a totally digital distribution system with no middle man interfering with the artistic process.

    Their business model is dead, they just haven’t realized it yet.

  52. Anything that helps to push the big recording industry players into the grave quicker can’t be totally bad.

    It’s time to move to a totally digital distribution system with no middle man interfering with the artistic process.

    Their business model is dead, they just haven’t realized it yet.

  53. http://www.loc.gov/crb/proceedings/2005-1/rates-terms2005-1.pdf

    If you read the agreement/settlement, only a hand full of broadcasters were included in this agreement. None of them seem to be independant.

    “SoundExchange argues in favor of a monthly fee
    equal to the greater of: 30% of gross revenues or a performance rate beginning at $.0008 per
    performance in 2006 and increasing annually to $.0019 by 2010.3″

    In the 1rst paragraph of page 17, you see that the royalty rate is only 30% of the gross revenue generated by use of the copyrighted songs.
    That’s not that much. If they’re MAKING that much money off of the music, shouldn’t they pay back?

    That’s the stated reason for the increase to $0.19 by 2010. Most likely inflation and raised costs.

    Since this judgement does not name independant broadcasters but instead names Microsoft, and Yahoo as defendants, one would have to assume that they are the ones pushing the issue to bloggers and paying digg posters to raise a fuss.

    http://digg.com/microsoft/MSFT_asking_you_to_write_leters_opposing_California_A_B_1668_Open_Document

    Remember when Microsoft didn’t want California to impose open document standards in Govt, and spammed millions of people in order to get them to write in to their elected officials against it? Because they were scared of open office?
    This smells of that.

    The ruling does not appear to be all inclusive to every internet radio broadcaster from what I read of the PDF. The 30% of gross revenue part specifically refers to Yahoo, Clear Channel, Microsoft and Al.

    Just like the Scoble facebook posts, this seems contrived.

  54. http://www.loc.gov/crb/proceedings/2005-1/rates-terms2005-1.pdf

    If you read the agreement/settlement, only a hand full of broadcasters were included in this agreement. None of them seem to be independant.

    “SoundExchange argues in favor of a monthly fee
    equal to the greater of: 30% of gross revenues or a performance rate beginning at $.0008 per
    performance in 2006 and increasing annually to $.0019 by 2010.3″

    In the 1rst paragraph of page 17, you see that the royalty rate is only 30% of the gross revenue generated by use of the copyrighted songs.
    That’s not that much. If they’re MAKING that much money off of the music, shouldn’t they pay back?

    That’s the stated reason for the increase to $0.19 by 2010. Most likely inflation and raised costs.

    Since this judgement does not name independant broadcasters but instead names Microsoft, and Yahoo as defendants, one would have to assume that they are the ones pushing the issue to bloggers and paying digg posters to raise a fuss.

    http://digg.com/microsoft/MSFT_asking_you_to_write_leters_opposing_California_A_B_1668_Open_Document

    Remember when Microsoft didn’t want California to impose open document standards in Govt, and spammed millions of people in order to get them to write in to their elected officials against it? Because they were scared of open office?
    This smells of that.

    The ruling does not appear to be all inclusive to every internet radio broadcaster from what I read of the PDF. The 30% of gross revenue part specifically refers to Yahoo, Clear Channel, Microsoft and Al.

    Just like the Scoble facebook posts, this seems contrived.

  55. http://blog.wired.com/music/2007/07/breaking-news-o.html

    As I expected. Just in. This settlement was between the defendants, Microsoft, Yahoo, ect… and SoundExchange, and not against the rest of the indy broadcasters.

    Even if the initial report would have been right the 30% gross OR .09 cent per song clause would have meant nothing for indy stations.
    30% of zero is still zero.

    Buried as inaccurate. digg–

  56. http://blog.wired.com/music/2007/07/breaking-news-o.html

    As I expected. Just in. This settlement was between the defendants, Microsoft, Yahoo, ect… and SoundExchange, and not against the rest of the indy broadcasters.

    Even if the initial report would have been right the 30% gross OR .09 cent per song clause would have meant nothing for indy stations.
    30% of zero is still zero.

    Buried as inaccurate. digg–

  57. Kids will find music via MySpace? Yes, to a degree, but there are at least two problems with that. First, radio comes to you. You turn it on and the music starts streaming to your ears until you turn it off. With MySpace you have to go looking for it. Some will, obviously, but will all? Second, following the recommendations of friends, and searching for artists that are similar to those you already know will tend to homogenize music. Radio can, though doesn’t always, offer up that surprise you’d never heard of otherwise.

    Whether it is XM, Pandora, last.fm, or hi-def radio, the music industry needs to get music into the ears of listeners. This is especially vital since the days of large music stores with expansive inventories are long gone and broadcast radio all sounds the same from coast to coast. Interestingly, most of the kids I know are using file-sharing as their generation’s FM radio. I say interestingly because, of course, this is the very thing that the music industry is trying to wipe out.

  58. Kids will find music via MySpace? Yes, to a degree, but there are at least two problems with that. First, radio comes to you. You turn it on and the music starts streaming to your ears until you turn it off. With MySpace you have to go looking for it. Some will, obviously, but will all? Second, following the recommendations of friends, and searching for artists that are similar to those you already know will tend to homogenize music. Radio can, though doesn’t always, offer up that surprise you’d never heard of otherwise.

    Whether it is XM, Pandora, last.fm, or hi-def radio, the music industry needs to get music into the ears of listeners. This is especially vital since the days of large music stores with expansive inventories are long gone and broadcast radio all sounds the same from coast to coast. Interestingly, most of the kids I know are using file-sharing as their generation’s FM radio. I say interestingly because, of course, this is the very thing that the music industry is trying to wipe out.

  59. @26 “Mike, in all fairness, these artists signed a contract with the record company saying that they would license their music in exchange for money.”

    That only applies to artists that have signed contracts with record labels. The majority of bands putting their music in myspace are not under contract to anyone, yet. Which is WHY they are going the myspace route. It allows them to build a fan base without having to be beholden to record labels for promotion.

    If I’m an artist and have NO contract with any music publishing company, what’s to legally stop me from distributing my work directly via the internet? This is how MySpace and podcasting is being used by these undiscovered artists.

    @30 “Radio can, though doesn’t always, offer up that surprise you’d never heard of otherwise.”

    Yeah! In the 50’s and 60’s that’s the way it happened. That’s less likely today, except maybe with satellite radio, which doesn’t have the OTA radio does. Today’s radio is so pre-programmed that rare is the PD that can play whatever he wants.

  60. @26 “Mike, in all fairness, these artists signed a contract with the record company saying that they would license their music in exchange for money.”

    That only applies to artists that have signed contracts with record labels. The majority of bands putting their music in myspace are not under contract to anyone, yet. Which is WHY they are going the myspace route. It allows them to build a fan base without having to be beholden to record labels for promotion.

    If I’m an artist and have NO contract with any music publishing company, what’s to legally stop me from distributing my work directly via the internet? This is how MySpace and podcasting is being used by these undiscovered artists.

    @30 “Radio can, though doesn’t always, offer up that surprise you’d never heard of otherwise.”

    Yeah! In the 50’s and 60’s that’s the way it happened. That’s less likely today, except maybe with satellite radio, which doesn’t have the OTA radio does. Today’s radio is so pre-programmed that rare is the PD that can play whatever he wants.

  61. Tim sent a mass mailing for people to call their congressman
    http://www.digg.com/tech_news/Online_Radio_Is_Saved_SoundExchange_Will_Not_Enforce_New_Royalty_Rates

    “Why did I receive the following email which exclaims only 3 hours ago that they were still in trouble?

    Hi, it’s Tim one more time…
    Disaster looms! Yesterday a federal court denied a plea..”

    He sent this 3 hours ago.

    He is asking people to get this bill passed:
    http://www.house.gov/inslee/docs/pdfs/internet_radio_bill_april_2007.pdf

    Section 3, subsection b. Subparagraph 1 and 2 of this new bill superceeds the existing rates, nullifying them and imposes the following for commercial broadcasters:

    1. 33 cents per hour of sound recordings transmitted to a listener.
    (by “a” that assumes 33 cents per listener per hour)
    2. 7.5% of the revenues received by the provider during that year that are directly related to the provider’s digital transmission of sound recordings.
    (instead of the 30% currently mandated)

    Neither this legislation nor the existing one that was supposed to take effect Sunday seems to cover music licensed under the creative commons license or self-published on sites like myspace.

    How can Pandora and other websites profit margins be so slim that they can barely afford the 7.5% gross and can NOT afford to pay 30% when that is their primary business?

    If they are that broke, shouldn’t they try to get non-profit status instead of continuing like this?
    Basically this new legislation Tim is pushing for is telling the music industry that they can not charge what they feel is fair for their own product. You could claim they have a monopoly, but why didn’t Congress also tell Microsoft that $500 was too much for Windows Vista Ultimate?

    Why stop there? Why doesn’t congress nail every monopoly then?

    Why don’t these stations play music that is under the creative commons license instead of get bands to upload the songs under a different agreement like Myspace?

  62. Tim sent a mass mailing for people to call their congressman
    http://www.digg.com/tech_news/Online_Radio_Is_Saved_SoundExchange_Will_Not_Enforce_New_Royalty_Rates

    “Why did I receive the following email which exclaims only 3 hours ago that they were still in trouble?

    Hi, it’s Tim one more time…
    Disaster looms! Yesterday a federal court denied a plea..”

    He sent this 3 hours ago.

    He is asking people to get this bill passed:
    http://www.house.gov/inslee/docs/pdfs/internet_radio_bill_april_2007.pdf

    Section 3, subsection b. Subparagraph 1 and 2 of this new bill superceeds the existing rates, nullifying them and imposes the following for commercial broadcasters:

    1. 33 cents per hour of sound recordings transmitted to a listener.
    (by “a” that assumes 33 cents per listener per hour)
    2. 7.5% of the revenues received by the provider during that year that are directly related to the provider’s digital transmission of sound recordings.
    (instead of the 30% currently mandated)

    Neither this legislation nor the existing one that was supposed to take effect Sunday seems to cover music licensed under the creative commons license or self-published on sites like myspace.

    How can Pandora and other websites profit margins be so slim that they can barely afford the 7.5% gross and can NOT afford to pay 30% when that is their primary business?

    If they are that broke, shouldn’t they try to get non-profit status instead of continuing like this?
    Basically this new legislation Tim is pushing for is telling the music industry that they can not charge what they feel is fair for their own product. You could claim they have a monopoly, but why didn’t Congress also tell Microsoft that $500 was too much for Windows Vista Ultimate?

    Why stop there? Why doesn’t congress nail every monopoly then?

    Why don’t these stations play music that is under the creative commons license instead of get bands to upload the songs under a different agreement like Myspace?

  63. The music industry is a dying business. Its business model is basically that of sponsoring artists by putting up the cash for record distribution. With the Internet now, artists don’t need labels anymore, they can freely distribute their music via the Internet. As CD’s continue to die out, the Internet will become the main medium of choice for artists leaving the major labels defunct and in search of a new business model.

    This whole debacle is just another sad attempt to create some revenue using an outdated business model. Children will get their music, but it won’t be from Internet radio, and that will be just fine.

  64. The music industry is a dying business. Its business model is basically that of sponsoring artists by putting up the cash for record distribution. With the Internet now, artists don’t need labels anymore, they can freely distribute their music via the Internet. As CD’s continue to die out, the Internet will become the main medium of choice for artists leaving the major labels defunct and in search of a new business model.

    This whole debacle is just another sad attempt to create some revenue using an outdated business model. Children will get their music, but it won’t be from Internet radio, and that will be just fine.

  65. I agree with poster #3.

    It is impossible to prevent music from being distributed over the Internet. It is so easy to set up a web hosting account in Anguilla or some other offshore place and stream it. The streams can be encrypted. It’s really easy to do. Costs money, but it’s possible. Ads help defray the costs.

  66. I agree with poster #3.

    It is impossible to prevent music from being distributed over the Internet. It is so easy to set up a web hosting account in Anguilla or some other offshore place and stream it. The streams can be encrypted. It’s really easy to do. Costs money, but it’s possible. Ads help defray the costs.

  67. @36 “Basically this new legislation Tim is pushing for is telling the music industry that they can not charge what they feel is fair for their own product. You could claim they have a monopoly, but why didn’t Congress also tell Microsoft that $500 was too much for Windows Vista Ultimate?”

    While I see your point, the analogy is a bit flawed. There is no monopoly in the music industry. Each recording company if free to charge what they want. Now if the “software industry” was trying to control the price of an OS, you would have a point.

    My question is where does Tim get off thinking he should be held to the same rates satellite radio pays?

    Internet radio has plenty to be concerned about regarding their future beyond this bill. They are facing pressure from myspace, the plethora of music blogs out there (I don’t see any of those in Scoble’s linkroll and other music discovery tools. So, to say this will spell the death to the music industry is shortsighted at best. Believe me, these artists will find plenty of outlets for their music. Internet radio is not the major source. If this “kills” internet radio I rather doubt it will have much of a broad impact on the music business.

  68. @36 “Basically this new legislation Tim is pushing for is telling the music industry that they can not charge what they feel is fair for their own product. You could claim they have a monopoly, but why didn’t Congress also tell Microsoft that $500 was too much for Windows Vista Ultimate?”

    While I see your point, the analogy is a bit flawed. There is no monopoly in the music industry. Each recording company if free to charge what they want. Now if the “software industry” was trying to control the price of an OS, you would have a point.

    My question is where does Tim get off thinking he should be held to the same rates satellite radio pays?

    Internet radio has plenty to be concerned about regarding their future beyond this bill. They are facing pressure from myspace, the plethora of music blogs out there (I don’t see any of those in Scoble’s linkroll and other music discovery tools. So, to say this will spell the death to the music industry is shortsighted at best. Believe me, these artists will find plenty of outlets for their music. Internet radio is not the major source. If this “kills” internet radio I rather doubt it will have much of a broad impact on the music business.

  69. “While I see your point, the analogy is a bit flawed. There is no monopoly in the music industry. Each recording company if free to charge what they want. Now if the “software industry” was trying to control the price of an OS, you would have a point”

    But they are lobbying collectively with SoundExchange and the RIAA.
    In the context of privates sales, no they are not a monopoly, but in the context of collectively pushing through legislation where distributers are forced to pay a fixed price to a conglomerated agency collecting on all their behalves, they are acting in a monopolistic fashion.

    If Pandora was able to negotiate one price with Virgin, another with Epic and yet another with RCA such as Apple is with iTunes, that would be a different issue. Here they are obligated to pay one faceless fixed tax to a privately held representative company regulated by the US govt, I think anyway.

    So there is no competition there.
    My point is that if the US congress can regulate this by lowering the royalty prices, why not go and regulate software abusers like Microsoft as well?

  70. “While I see your point, the analogy is a bit flawed. There is no monopoly in the music industry. Each recording company if free to charge what they want. Now if the “software industry” was trying to control the price of an OS, you would have a point”

    But they are lobbying collectively with SoundExchange and the RIAA.
    In the context of privates sales, no they are not a monopoly, but in the context of collectively pushing through legislation where distributers are forced to pay a fixed price to a conglomerated agency collecting on all their behalves, they are acting in a monopolistic fashion.

    If Pandora was able to negotiate one price with Virgin, another with Epic and yet another with RCA such as Apple is with iTunes, that would be a different issue. Here they are obligated to pay one faceless fixed tax to a privately held representative company regulated by the US govt, I think anyway.

    So there is no competition there.
    My point is that if the US congress can regulate this by lowering the royalty prices, why not go and regulate software abusers like Microsoft as well?

  71. I guess what I am wondering is, why isn’t this dealt with on a case by case basis like normal copyright cases?
    The defendants named in the soundexchange doc were clearchannel, yahoo, Microsoft ect…
    The plaintiffs were only the music labels that are represented by soundexchange NPO.
    Why is everyone affected by this by blanket legislation of parties that were not involved in the dispute?

    Why is there a new bill that nullifies the old one and imposes lesser fees?

    How come Steve Jobs is able to negotiate non-DRM mp3 downloads with EMI ONLY and not all the record labels?

    What if MS and Apple got together and decided they wanted to lobby a fixed tax for PC makers to distribute their OS’s under the guise of preventing piracy and collecting royalties and did so under an umbrella NPO?
    Wouldn’t that be the same thing?

    LayZ, if I am not understanding correctly, please let me know.

  72. I guess what I am wondering is, why isn’t this dealt with on a case by case basis like normal copyright cases?
    The defendants named in the soundexchange doc were clearchannel, yahoo, Microsoft ect…
    The plaintiffs were only the music labels that are represented by soundexchange NPO.
    Why is everyone affected by this by blanket legislation of parties that were not involved in the dispute?

    Why is there a new bill that nullifies the old one and imposes lesser fees?

    How come Steve Jobs is able to negotiate non-DRM mp3 downloads with EMI ONLY and not all the record labels?

    What if MS and Apple got together and decided they wanted to lobby a fixed tax for PC makers to distribute their OS’s under the guise of preventing piracy and collecting royalties and did so under an umbrella NPO?
    Wouldn’t that be the same thing?

    LayZ, if I am not understanding correctly, please let me know.

  73. Jeez! Even you should grasp that joining defendants in a lawsuit reduces duplication of effort and costs. (BTW, Chris, aren’t you supposed be boycotting Scobleizer because of iPhone coverage?)

    I believe my earlier comment has been confirmed: The big players have the most to gain from reduced royalty fees. Pandora is no 800 pound gorilla of Internet music like Yahoo, but it is not the beggar it is pretending to be, either.

  74. Jeez! Even you should grasp that joining defendants in a lawsuit reduces duplication of effort and costs. (BTW, Chris, aren’t you supposed be boycotting Scobleizer because of iPhone coverage?)

    I believe my earlier comment has been confirmed: The big players have the most to gain from reduced royalty fees. Pandora is no 800 pound gorilla of Internet music like Yahoo, but it is not the beggar it is pretending to be, either.

  75. @41 There is still a difference. The RIAA basically represents music distributors, not necessarily the music publishers or the record companies. So, EMI and Sony are not getting together to determine a fixed price. There is no central entity that controls the distribution and collection of software license fees for companies. The closest thing to the RIAA in the software industry is the SPA.

    What the RIAA is basically saying is the these internet radio sites have no right to distribute this music without paying a fee. The music is not “public”. It would be much like you setting up a web site to freely distribute software without paying license fees to the producers of the software. Satellite radio pays fees for the rights to broadcast music, so why should internet radio be exempt?

    What’s different between this and traditional radio? If you want to operate a broadcast station in the US, you get a license from ASCAP [ascap.com] and BMI [bmi.com]. The RIAA definitely doesn’t get a piece of that. ASCAP, BMI represent the artists. The RIAA represents the record labels. See the difference? (although they are trying) If one is of the mindset that anybody who wants to be paid for providing music is evil, then I suppose there isn’t much difference at all, but this is a vital distinction to understand for those who think “artists good, record companies bad.”

    Many in the opensource crowd attack and publicly castigate developers who don’t follow the GNU license. Following that line of thinking you should NOT attack RIAA for protecting IP rights. But don’t steal RIAA’s stuff and fool yourself into thinking that you’re taking a moral stand by doing so. (I’m using “you” generically)

  76. @41 There is still a difference. The RIAA basically represents music distributors, not necessarily the music publishers or the record companies. So, EMI and Sony are not getting together to determine a fixed price. There is no central entity that controls the distribution and collection of software license fees for companies. The closest thing to the RIAA in the software industry is the SPA.

    What the RIAA is basically saying is the these internet radio sites have no right to distribute this music without paying a fee. The music is not “public”. It would be much like you setting up a web site to freely distribute software without paying license fees to the producers of the software. Satellite radio pays fees for the rights to broadcast music, so why should internet radio be exempt?

    What’s different between this and traditional radio? If you want to operate a broadcast station in the US, you get a license from ASCAP [ascap.com] and BMI [bmi.com]. The RIAA definitely doesn’t get a piece of that. ASCAP, BMI represent the artists. The RIAA represents the record labels. See the difference? (although they are trying) If one is of the mindset that anybody who wants to be paid for providing music is evil, then I suppose there isn’t much difference at all, but this is a vital distinction to understand for those who think “artists good, record companies bad.”

    Many in the opensource crowd attack and publicly castigate developers who don’t follow the GNU license. Following that line of thinking you should NOT attack RIAA for protecting IP rights. But don’t steal RIAA’s stuff and fool yourself into thinking that you’re taking a moral stand by doing so. (I’m using “you” generically)

  77. LazY, you don’t need to use ‘you’ generically with Chris. He is a member of the Church of Richard Stallman. Too bad he’s not American. He won’t be able to vote for Dennis Kucinich for president-:).

  78. LazY, you don’t need to use ‘you’ generically with Chris. He is a member of the Church of Richard Stallman. Too bad he’s not American. He won’t be able to vote for Dennis Kucinich for president-:).

  79. “@41 There is still a difference. The RIAA basically represents music distributors, not necessarily the music publishers or the record companies. So, EMI and Sony are not getting together to determine a fixed price.”

    http://en.wikipedia.org/wiki/List_of_RIAA_member_labels

    “”Big Four” RIAA members

    * EMI
    * Sony BMG Music Entertainment
    * Universal Music Group
    * Warner Music Group

    Cough, ah, yes they are.

    “LazY, you don’t need to use ‘you’ generically with Chris. He is a member of the Church of Richard Stallman. Too bad he’s not American. He won’t be able to vote for Dennis Kucinich for president-:).”

    I stood defiantly against Mr. Stallman shaking my head no when he gave his speech on the evils of software patents at MIT this past March. I believe small software companies can benefit from software patents, and I do not blindly follow the FSF, but rather have my own opinions based on my own experience.

    I am in fact American and can vote in Elections in NY State by absentee ballot, but I am a dual citizen of both the US and Canada. I’ve lived half my life in the USA and half in Canada.

    Ebay’s Kijiji tried to wipe my help wanted ad in the South SF area in Cali today based on me being in Canada, but I talked some sense into them into letting it stay up. If you are in that area, please browse the help wanted sales section and respond privately. If you come on board, you get a free hat, I promise.

  80. “@41 There is still a difference. The RIAA basically represents music distributors, not necessarily the music publishers or the record companies. So, EMI and Sony are not getting together to determine a fixed price.”

    http://en.wikipedia.org/wiki/List_of_RIAA_member_labels

    “”Big Four” RIAA members

    * EMI
    * Sony BMG Music Entertainment
    * Universal Music Group
    * Warner Music Group

    Cough, ah, yes they are.

    “LazY, you don’t need to use ‘you’ generically with Chris. He is a member of the Church of Richard Stallman. Too bad he’s not American. He won’t be able to vote for Dennis Kucinich for president-:).”

    I stood defiantly against Mr. Stallman shaking my head no when he gave his speech on the evils of software patents at MIT this past March. I believe small software companies can benefit from software patents, and I do not blindly follow the FSF, but rather have my own opinions based on my own experience.

    I am in fact American and can vote in Elections in NY State by absentee ballot, but I am a dual citizen of both the US and Canada. I’ve lived half my life in the USA and half in Canada.

    Ebay’s Kijiji tried to wipe my help wanted ad in the South SF area in Cali today based on me being in Canada, but I talked some sense into them into letting it stay up. If you are in that area, please browse the help wanted sales section and respond privately. If you come on board, you get a free hat, I promise.

  81. Really, Chris, you pay more than a successful law firm?

    Perhaps you and Richie Stallman don’t sleep together, he being much too hirsute and all, but your opinions, expressed at length and then some at Scobleizer, are quite similar to his.

  82. Really, Chris, you pay more than a successful law firm?

    Perhaps you and Richie Stallman don’t sleep together, he being much too hirsute and all, but your opinions, expressed at length and then some at Scobleizer, are quite similar to his.

  83. it has been in the Internet news for almost three weeks now and it’s really making me sad. Maybe a part of me hate those who are responsible for making these things happen and a part of me is that there would come a time that the music I used to hear would no longer be available for free. I just hope that they could have a heart to consider these small music internet radios – for us, the music lovers.

  84. it has been in the Internet news for almost three weeks now and it’s really making me sad. Maybe a part of me hate those who are responsible for making these things happen and a part of me is that there would come a time that the music I used to hear would no longer be available for free. I just hope that they could have a heart to consider these small music internet radios – for us, the music lovers.

  85. […] Goodbye to the music industry “So, why do I say goodbye to the music industry? Because how do kids find out about new music? On the Internet. Where on the Internet? Radio stations. Well, when they aren’t stealing music or borrowing their friends iPods that is.” More info. Given this disappointing news about internet radio, now check out this article on libraries: […]