Several readers have observed this quite eloquently, but let’s summarize: laws around music are complicated, messy, and confusing. If they don’t seem that way to you, you’re either a lawyer or you haven’t done your homework. That said, without question, proposed changes to streaming music licensing fees would be devastating to Internet radio, because not just top 40 music requires license fees — even many indie labels are RIAA members and participate in SoundExchange. But here’s the key: they’d be devastating as proposed. And suddenly, at the eleventh hour, SoundExchange seems to be backpedaling. (Their strategy, evidently: push as hard as possible until the last conceivable moment, then find a deal that works for them — while they retain the upper hand at the bargaining table. Surprise, surprise.)

SoundExchange Tells Congress Webcasters May Keep Streaming [Kurt Hanson / Radio and Internet Newsletter]

A number of SoundExchange’s olive branches have been largely publicity stunts, but this seems real:

1. July 15 is no longer D-Day. SoundExchange promises that, as long as broadcasters are negotiating with them and continue to pay previous rates, they don’t actually have to start coughing up money at the new rates. In other words, instead of the July 15 deadline being the melodramatic “Day the Music Dies,” it’s now more accurately the “Day the Music Tentatively Continues Under a Cloud of Uncertainty While Mysterious Closed-Door Bargaining Sessions Try to Find Some Amicable Solution, or Not, We’re Not Really Sure.”

2. Maybe SoundExchange won’t cripple mega-channel content, after all. The one side of this we hadn’t covered was that the SoundExchange position would require a minimum of US$500 per channel — meaning services like Pandora and Rhapsody would be instantly crippled because they have countless channels, rather than individualized channels in the traditional sense. Think “dog bites off Long Tail.” Supposedly they’re now making headway on this point.

SoundExchange specifically mentioned wanting to protect the interests of college radio and NPR, and anyone else who will keep negotiating with them. And if there’s one thing they love, it seems to be negotiating.

Let’s put it this way: uncertainty is bad for Internet Radio. So even if July 15 isn’t a deadline, after all (yay!), it is absolutely imperative for the business models going forward that SoundExchange and the broadcasters sort this out. As for what this means for musicians, as many of you wisely point out, the majors still dominate music listening and none of this tends to amount to much in the way of actual checks for most music creators. On the other hand, because these services are often looking for ways to monetize content, selling the actual music remains in their best interests, as well. My sense is, somewhere beyond this dark, complex era of negotiations, we may actually start to see a real business ecosystem grow around music listening, one that’s distinct from that of the radio and CD/vinyl album era. In the meantime, negotiations continue.

  • bliss

    This is one of those things that makes you go, hmm…

  • This opens up a major opportunity for non-solicited artists to offer their music privately to these stations with a no royalty clause or a low fee licensing period.

    I hope internet radio owners do not give in. They must see they are being bullied , and to owe backdated fees is robbery and not justifiable.

    Stay strong internet radio owners, start going directly to the artists and small labels to secure content. I know it's more work but at least you'll be able to survive. Who knows this could be the best thing to happen for all up and coming artists who want to simplify the way music is handled.

    Take care.


  • bliss

    I was just thinking that if many of the Internet radio stations went off the air then that would could possibly be the last thing that SoundExchange would want to happen. Peter has already mentioned this, I believe. If Internet radio went off the air then the only thing that would bring favorite stations back would be that SoundExchange capitulates to fair fees. By keeping stations on the air SoundExchange remains in a more favorable position to get what they want from stations. No stations means no money at all. SoundExchange seems to know the real score after all. Internet radio stations and listener supported stations should stand firm on what they believe is reasonable.

  • Johnnymi25

    little bit of history repeating; correct me if im wrong but wasn't it some thing similar to this back in the day that forced radiostations to go and seek out NON Union tallent hence the rise of county and of blues?

  • velocipede

    Of course, SoundExchange does not want to crush Internet broadcasters. I think the RAIN article that Peter mentions shows pretty clearly that their big concern is getting "fair" (which is up for debate) royalties, especially from for-profit businesses. It may seem like they are pounding on NPR and college stations, but I think that they are trying to defend their position so that as commercial web-casting grows, "fair" royalties will be paid to rights-holders.

    As for the heavy-handed approach, I guess that is the way these games are played in the USA. FWIW, the person from SoundExchange that I talked to said that they wanted to talk more with the other parties.

    I'm not out defend either side of this fight, but I do think that we are not hearing so much about the "other" side of the debate, probably because one side controls the media under contention. I found KCRW's ominous "send us money to defend Internet radio" ads to be heavy-handed, too.

  • velocipede

    Here is one label that is dealing creatively with the issue of royalties (among other things).

    They may not succeed, but they do show a way for small labels and artists to make their music available without royalties.

    (Heard about this on a KCRW On the Beat podcast.)