Recording industry again trying to chase off their audience

Year after year, the RIAA (Recording Industry Association of America) pursues tactics which drive away music listeners or turn the listening audience to other entertainment venues. Sueing the demographic most likely to listen to and purchase music in recent years wasn’t enough. Now to drive more potential customers away, recording industry representatives have plans to set music royalty fees so high that the vast majority of American-based internet radio stations will have to shut down. This move was originally planned for a few years ago, but the otherwise unthinkable ally of Senator Jesse Helms worked to block legislation that would have allowed this in 2002.

Planning new, retroactive royalty fees, the Copyright Royalty Board set 2006 rates at 0.08 cents per song played per listener. The 2007 rates will go to 0.11 cents, with 2008 through 2010 seeing 0.14 to 0.18 to 0.19 cents. This might not sound bad, but considering how young the industry is and how income is lacking for internet based radio operators, this will drive most of them out of business. Consider for example the case of Accuradio. With 2006 revenues of roughly $50,000, the company will receive a 2006 royalty bill of around $600,000. With a minimum rate of $500 per channel per year, the math looks bad for most internet broadcasters.

If you take the time to read Doc Searls’s coverage of this, you’ll learn that this royalty rate is based on a magical candy-store fantasy world in which the 1999 Yahoo purchase of for internet radio purposes was not horridly ever-inflated and where advertisers are still paying the stupid-high rates from the late 1990s (this rates that vanished and caused the dot-bomb collapse of much of the online marketplace). Doc Searls in that same article also notes that Soma-FM, another internet radio broadcaster, is looking at a 2006 royalty bill of $600,000 off revenue of only $22,000.

I get that the recording industry and recording artists should be paid for their offerings. I agree that something needs to occur, but all this move will do is close down internet radio. That will eliminate all royalties for artists and the industry money-whores who make these decisions. The executives at the RIAA appear intent on chasing away all potential consumers, which doesn’t make sense to me. Still, if you care about radio delivered via the internet, check out the links I’ve made above. There is a lot of detail available for this story, but it is spread over several sites. I will say now that at this point, I’ve pretty much fallen back to downloading NPR talk-radio podcasts and listening to them on my MP3 player or playing the CDs I bought years ago when it was possible to find more than 2 good tracks per CD. Most of the music industry now is just crap with a thin layer of icing to grab your attention.

[tags]RIAA working hard to further reduce music listening audience, Recording industry thinks lawsuits aren’t enough to drive away hated customers[/tags]

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