The Age of Dark Payola
Netcasters take it in the pooper from the Copyright Royalty Board. The FCC certifies the HD Radio scam.
By David DownsArticle Tools
- Eric Lister
Bay Area leading light SomaFM faces crippling debt and insolvency along with many of its Internet radio peers including Pandora and Live 365 this Spring. Late last March, the Copyright Royalty Board — three dudes in Washington — raised SomaFM's webcasting rates from $10,000 in 2005 to $600,000 for 2006 (applying retroactively).
The ruling is "fair," says the top honcho of SoundExchange, the royalty collection group lobbying for higher rates on behalf of the major labels and artists.
"Staggering," is more like it, says SomaFM founder Rusty Hodge. "We were expecting rates to go up 10, maybe 20 percent. It would be painful, but at least it wouldn't put us out of business."
SoundExchange says it needs top dollar for artists. "Webcasters have a number of opportunities to maximize revenue with ... banner ads, pop-ups, video pre-rolls, audio commercials," says John Simson, executive director of SoundExchange.
But Hodge says he isn't interested in annoying his listeners, and exposure means more than gold to the indie bands he streams. Webcasters will seek relief through the legislature, because Hodge doubts such relief will emerge during a possible re-hearing before the Copyright Royalty Board in the coming weeks.
Zooming out for a moment, the whole netcast debacle fits into a bigger picture that spells out the banal maxim: Fool me once, shame on you. Fool me twice, shame on me. Recording labels suffered two major burns in the 20th century: 1) Labels failed to negotiate terrestrial, on-air radio royalties and radio became a billion-dollar industry with their music; 2) Labels failed to negotiate royalties for music videos on MTV, and another empire cashed in.
Now, no one's building any more empires with their content, goddammit. Not Napster, Kazaa, Morpheus, LimeWire, or BitTorrent. Not YouTube (sued by Viacom), MySpace (sued by Universal), and definitely not a bunch of pissant throwbacks to college radio.
The majority of Americans who don't listen to netcasts should care about all this, because developments in that pond have ramifications for the on-air world, says Hodge. Terrestrial radio stations may soon face Internet radio's two sucky choices: 1) Pay SoundExchange through the nose for whatever the station wants to play, or 2) Save money by making direct, legal deals with record labels to play a label's free "Abomination of the Week." I'm looking directly at you, Korn Unplugged.
It's the opposite of payola but with all the effects, says Hodge. It's Dark Payola.
"They're going after the over-the-air broadcasters next," he says. "There's no doubt. And if you think media consolidation is bad now, wait till it's back to the old payola days."
At this point, you, the reader, are supposed to write congresspersons, sign petitions, and make bumpers stickers stating: "Down with Dark Payola!" There better be concerts, artists. Good ones. Plugged-in ones. Korn will not be invited.
Being a cynic means you get to be right a lot. So after expecting and then watching Internet radio webcasters strangled in their crib, there comes a certain dark glee in seeing Big Radio finally get its long-awaited approval for its horrid new HD system.
To recap what I wrote in March, HD Radio tops the list of corporate scams. The word "monopoly" fails to encompass this carny shill. Public broadcasting licenses are licenses to print money, and Big Radio's mints just got four times bigger with no givebacks to the public.
"A dream delayed" is what one FCC dissenting commissioner called the dream of a thousand little local radio stations doing their thing. New technology can boost the number of radio stations similar to TV's move to cable. If we stick to the metaphor, it's as if ABC, CBS, Fox, and NBC now owned all the cable channels too.
Cracks in my cynicism have come courtesy of more than dozen letters from all over the country. A lot of veteran broadcasters wrote in positing very cogent points. One pointed out: "All my peers in radio have been silenced, even though they don't want to go along." They say HD's flaws include super-bad distortion in the AM range and a bass-ackward interface courtesy of thirty-year-old technology.
Yet, these keen readers don't see HD and the billions of dollars that support it in Washington as a done deal. Public comments on HD are still open, they say, and people on the street seem to be voting "no" with their pocketbooks. "Big Radio covets our public airwaves," says Milspec390. "Our influence counts. Let's use it."
If by "influence," Milspec means "money," then yes, it does count. But most people are saving their influence right now for something more important to them ... like an iPhone.
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This Monday morning, the 16th of April, the Copyright Royalty Judges for the Copyright Royalty Board (the "three dudes in Washington") summarily dismissed all parties' request for a rehearing. ALL PARTIES, being everyone who put in an appeal, which included NPR, college radio, internet radio, and more. So, any chance of a rehearing, or reconsideration, of these fees is now gone. Their reasons for doing so emulate the SoundExchanges' reasons for why they should deny us a rehearing so closely, it's suspicious. We at SomaFM (I'm the Music Director for Indie Pop Rocks! on SomaFM, where I work with Rusty Hodge) are currently working with a new coalition called SaveNetRadio (http://www.savenetradio.org/), and we're working on trying to overturn this ruling. But we need people who think that this ruling is unfair to write their Congressional Representatives. Many Congresspeople are only vaguely aware of what we're going through with this, and haven't voiced their opinion regarding the issue. Thanks, in advance, to anyone who can help out by writing in and making their voice heard. -elise@somafm.com
Our influence counts. Let's use it. BigKorpseorate KronyKasters view influence as cash, with which to buy those obligated to protect public airwaves. HD/iBLOC is rotten technology. HD reduces fidelity, coverage, choice, and costs you money. HD shill parrots rabidly deny its noisy East Bloc jamming. HD jams all but a few oligarch-controlled stations, makes you discard your radios and buy costly HD stooge sets that hear the usual dull faire. Talk about a three-way cash grab. Aren't they smart? Why do they think we'll fall for it? Our influence is already being counted. Market research shows we see HD as a flat-line, gorked-off, putrid stiff in wait of burial. Write the FCC. They'll ignore your letter. So what? Tell Congress. They recently chided the FCC for pandering to self-serving schemes, HD clearly among them. FCC won't ignore Congress. If we value what we have, and abstain from buying HD stooge radios, we'll ensure our airwaves remain ours. Though they deny it, Team HD quietly promotes 'pay to hear' shows on 'appropriately unlocked' HD radios. Doesn't that have a nice ring to it? First, they jam your airwaves. Next, you spend hundreds on lousy HD radios. Then, you pay to have them 'appropriately unlocked'? Why? To hear dull KronyKaster 'shows'? Are we having progress yet? You bet. Progress - East Bloc Style! Why buy into radio oligarch's bad faith schemes? Our influence counts. Let's use it. Dr. Paul Vincent Zecchino Manasota Key, Florida 18 April, 2007
I posted comments on David's original article, "HD Radio on the Offense", but I would like to put on different perspective on my comments this time. It is a given that HD Radio is a farce - the HD Radio Aliiance owned 50KW AM stations block out the smaller AM stations with adjacent-channel interference, the HD/IBOC audio quality (not that anyone cares) is not "CD quality" and frought with digital artifacts (just consider digital cell phones), HD radios annoyingly switch back-and-forth to analog, when out of range of the HD/IBOC digital signals, the HD1 streams are just digital copies of the main analog channel, and the HD2 streams are underfunded, bland, repetitve niche programming and after this year, will contain commercials, if ever profitable. I grew up in the 1960s, with transistor radios - I have across many stories, on the Web, of how transistor radios played an important part in many peoples' lives, and there is even a Website dedicated to childhood transistor radios: http://www.childhoodradios.com So, if you are a radio enthusiast, and are interested in preserving one our few childhood treasures, you must Say No To IBOC, before it completely trashes our beloved AM band with digital hash !
saw this on a wall at school.... WAKE UP: 1500 college students have been sued and now internet radio is on it's last leg……… Take the PLEDGE 1. I WILL NOT BUY ANY CD'S OR DOWN LOAD FOR PAY MUSIC 2. I WILL LISTEN AND SUPPORT COLLEGE RADIO STATIONS ONLY 3. I WILL WRITE MY CONGRESSMEN AND SENATORS I WILL CONTINUE THIS UNTIL SOUNDEXCHANGE HAS BEEN DISBANDED AND THERE ARE FAIR LAWS FOR WEBCASTERS….. SO TAKE THE PLEDGE Copy what is between the words PLEDGE and send them to your friends either thru email or just printing something out or tell them….but get the word around….it is time to take back our music…SPREAD THE WORD Webcasters aren't arguing that there should not be royalties. They have been paying them for years. They aren't even arguing that the royalties should be as low as terrestrial royalties. They just want the royalties to be at a reasonable level such that the services can continue to operate
HD radio will fail and not for the reasons listed in other comments. People are not going to by HD radios - even if the price drops to 30 dollar per unit (which it wont.) There is no "killer ap" that's going to motivate anyone to buy a new HD radio because if a radio format was so good people were scrambling to listen to it corporate radio would put it on normal radio. Even if retailers stopped selling normal radios and only sold HD radios it would take decades to reach a sizable market penatration. Even if all new cars starting today came with a FREE HD radio already installed (which they don't) it would take 30 years to build up enough of an audience that advertisers would care. The FM radio that wakes me up in the morning I've had for 20 years and its going to last me another 20 years at least. The only way that HD radio is going to work is if 1) HD radios were given away for free and 2)the radio police came and took away all the old radios that work just fine. HD radio is a solution for radio stations - the one I work for is talking about it - but consumer don't even know it exists. They don't want it and they don't care about it. HD radio is already dead - but radio stations just don't know it yet.
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