UPDATE 4/16/07: Today the CRB denied motions to have a rehearing. The new rates stand to go into effect on May 15, 2007 unless Congress or an appeals court intervene. Make sure you write your Congressional representatives, sign the petition, post about this issue in any forums you frequent, and remind all your Internet Radio lovin' friends to do the same. UPDATE 4/26/07: A bill introduced in Congress Thursday aims to overturn a controversial royalty fee increase that Internet radio advocates say threatens to cripple their services. The "Internet Radio Equality Act," introduced by Reps. Jay Inslee (D-Wash.) and Don Manzullo (R-Ill.), would invalidate a March 2 decision by the U.S. Copyright Royalty Board that calls for raising royalty rates paid by Net radio operators. Read more about the HR 2060 Bill. UPDATE 5/13/07: On May 10th Senators Ron Wyden (D-OR) and Sam Brownback (R-KA) introduced companion bill S1353 in the Senate. The bill name, text and rates in the Senate version of the Internet Radio Equality Act are the same as the House version. Meanwhile, as of 5/13/07, HR 2060 in the House has collected 64 sponsors. UPDATE 1/1/08: The issue over netcasting royalties will be heard in the District of Columbia courts some time this Spring. Anylists project it may be 2009 before that process is completed. Contact your representatives in Congress now and ask them to co-sponsor these bills!

On March 2, 2007 the Copyright Royalty Board (CRB) set new sound recording royalty rates (administered by SoundExchange) for webcasters, retroactive to 2006. The new ruling abolishes percent of revenue payment schemes for small webcasters, and requires all webcasters to pay huge fees on a per play basis, with no consideration given station revenue. This new rates will have a major negative impact on both small and large webcasts. It's been calculated by webcasting industry professionals that the new rates would require many, probably most webcasters to pay 100% or more of their revenue in royalty fees. By comparison, combined fees collected by the songwriters & publishers organizations (BMI/ASCAP/SESAC), which webcasters also pay, total around 5.5% of revenue.

The previous payment scheme for small webcasters, the one which EBR operated under in good faith for 2006 and the begining of 2007, was fairly based on percent of revenue, with a minimum annual fee of $2,000. In EBR's specific situation, the station's annual revenue for 2006 was around $2,000, and is projected to be around $2,500 for 2007. So as you can see it hasn't been much more than a break even financial deal for me. I webcast because I enjoy promoting Independent and International blues not available on terrestrial radio.

However, if the new ruling stands, I'd be expected to pay over $15,000 retroactively for 2006, and my bill for 2007 would be over $20,000. By 2010 my annual bill would grow to over $35,000. Of course, I can't afford to risk those astronomical fees, so I'll likely be forced to close my station to free listeners soon. Hopefully, under continued disapproval from listeners, webcasters and artists, the ruling will be overturned (which could take months), and I'll be able once again to promote all artists... Major Label, Independent, and International, to all who wish to listen in.

Here's a link providing more details and information on what you can do to help:
http://www.SaveNetRadio.org

This is a website started up by a coalition of Internet Webcasting advocates specifically to inform and organize webcasters, listeners and artists.

Quote from the site:
"We built this site as a resource for Internet radio listeners, webcasters, and journalists to get the basic facts of the situation facing the Internet radio industry in the wake of the March 2 Copyright Royalty Board rate determination."

How did we get into this mess? Here's a somewhat lengthy but very interesting article from RAIN that details the timeline and thought process:
http://kurthanson.com/archive/news/031607/index.shtml

Who's duping who??

On their website at this link, SoundExchange emplores you to "Stand up for artists' right to be paid fairly!!!!" and "write to Congress today!". But they're not telling the full story, and what they are telling is fraught with deceit.

Industry analysts have calculated that the new rates will cost more than 100% of the revenue generated by many small and medium commercial webcasts. Here's a link to one such analysis at RAIN (Scroll down a bit to view the "Rain Analysis").

So the new rates are exhorborant and unfair, and will drive many Independent webcasts off the Internet. But that's not the only problem...

SoundExchange collects royalties from every legitamate webcast (terrestrial radio does not pay these fees) on behalf of every artist whose music is netcast on the Internet. This is true whether an artist/band is a member of SoundExchange or not. However, the current system seems to work only for the big name artists and major labels, if at all. EBR's playlist is dominated by Independent music. Since 2002 when SoundExchange first started collecting royalties for performers and labels, EBR has netcast millions of hours of songs from 100's of Independent artists to many thousands of listeners... yet not one single EBR featured Independent artist has reported receiving one single payment from Sound Exchange!! It appears all the money goes to the major labels, big name artists, and to the operating staff of Sound Exchange.

I feel strongly that labels and artists should be fairly compensated for their work.... but not to the tune of 10 times station revenue (In EBR's case). Most small commercial webcasts will do a little better... the royalty fees will only consume 100% of their revenue! Still hard to buy groceries under that plan.

No, it's not the small webcaster exploiting aritsts as SoundExchange suggests. Rather, it's SoundExchange and the RIAA who are doing the exploiting. It's my belief SoundExchange and the RIAA want to squeeze independent stations like ElectricBlues Radio off the air, so that net listeners' only option will be listening to major label sponsored music. Isn't that' what's wrong with commercial terrestrial radio now?

Whether intentional or not, if allowed to stand the new ruling would result in Independent music once again becoming severely repressed, if not squeezed out all together, just when it seemed Independent artists were FINALLY finding a viable outlet for their music. If you enjoy Independent Internet radio and the independence from commercial radio small webcasts like ElectricBlues Radio provide, please do as SoundExchange suggests.... visit the provided links, sign the petitions, and let your government representatives know where you stand on the issue..

Herm - ElectricBlues Radio