First off, I was wrong yesterday in my criticism of the Internet Radio Equality Act and internet radio in general. I received a response from an internet radio provider, John, and it is in the comment section from yesterday’s post but I am going to copy it in it’s entirety here.
John
Some clarifications to help you sort through the legalese. I run a small Net Radio station. I raise about $1200 a month in donations. That get spent on hosting ($800), Songwriter/Composer Royalties ($120), Artist/Label Royalties ($120) and whatever remains is spent on more music.As you can guess, it’s not exactly a money-maker. If I break even, I’m delighted.
The songwriter/composer royalties are not part of this decision. It’s SoundExchange, who collects money for the labels and performers, that’s the issue here. Under the new rates, my $120 a month payment to SoundExchange would jump to $3000 a month. That’s an increase of over 2,000 percent and there is absolutely no doubt that I would be forced to close. My station’s nowhere near big enough to attract advertisers, and I can’t raise that kind of money from 200 listeners.
Again, the songwriter/composer payments would remain the same. It’s the record labels that benefit from this rate hike, although you have to question how much they really would benefit. Dead webcasters pay no royalties.
Thanks for bringing attention to this issue - it’s an important one for music lovers and creators alike.
When I looked up the Internet Radio Equality Act, This was the heading…
H.R. 2060: To nullify the March 2, 2007, determination of the Copyright Royalty Judges
So, I then looked up the March 2, 2007, determination of the Copyright Royalty Judges which you can find in a .pdf here.
Here is how I made my mistake. There are two types of copyrights involved. One the actual song copyright that is owned by the writer of the song. Also, there is a sound recording copyright (the actual performance or recording of the song) which is owned by the performer or record label.
The Internet Radio Equality Act does mention the sound recording copyrights once but, mostly it refers to sections and sub-sections of the Copyright Royalty Judges decision.
In Royalty Judges document, the phrase “performance royalties” is in the opening description. Traditionally that is a phrase that pertains to the royalty a songwriter get’s paid when their song receives airplay. My mistake was, that in this case, they are also referring to royalties that would go to the owner of the sound recording copyright (label/performer).
Royalties for radio airplay were designed to ensure that the songwriter got some benefit. When they first started this (in the case of radio), it was decided that the performer or label would not get a royalty because, airplay was considered advertising or promotion of a record. To this day, royalties are not paid to the performer/label on traditional radio.
As I looked through the Copyright Royalty Judges document, I did not read it in it’s entirety. It’s 104 pages long. I was looking specifically for language that applied to the actual song copyright as opposed to the sound recording copyright.
So, in a nutshell, I was wrong. I was as wrong as I could be.
The Internet Radio Equality Act should be supported. The Copyright Royalty Judges or SoundExchange are trying to bilk money for major record labels.
John, I humbly apologize to you and anyone who is involved in the internet radio business.
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