[IP] end of string -- another point of view on : A webcaster's take on royalty rates
Delivered-To: dfarber+@xxxxxxxxxxxxxxxxxx
Date: Wed, 11 Feb 2004 19:21:14 -0800
From: Rusty Hodge <rusty@xxxxxxxxx>
Subject: Re: [IP] another point of view on : A webcaster's take on royalty
rates
To: dave@xxxxxxxxxx
Hi Dave,
You can publish this if you want, but I don't want to get into a flame war
on your list. Feel free to edit as you see fit.
Brian Hurley is not privy to SomaFM's finances and therefore is not in a
position to say "[SomaFM] also receives a free bandwidth subsidy from AOL,
which is the only way he can afford to pay the SWSA fees and continue
broadcasting."
SomaFM has always worked deals to get as much little or no-cost bandwidth
for our broadcasts as possible. SomaFM provides advertising free music and
there are many ISPs who find our broadcasts are an attractive reason for
many people to get DSL. ISPs often have excess capacity on their backbones,
and that makes a nice fit with us. We get "free" bandwidth, they use their
excess capacity to help out a service that many of their users enjoy. It's
a win for everyone.
While we get a lot of "free" bandwidth, we pay for a lot too. SomaFM's
bandwidth bills are several times our SWA (formerly called the SWSA)
royalty fees of $2000 a year. SomaFM was on the air for well over a year
before I ever got any AOL bandwidth. I will still be on the air if AOL and
others stop providing that bandwidth.
Brian Hurley and the Webcasters Alliance group apparently oppose anyone who
supported the Small Webcasters Amendment because they think a $2000 a year
minimum royalty fees to the RIAA for internet broadcasters is unfair, and
that the SWA supporters "sold out" other internet broadcasters. I supported
the SWA because it was the only viable option on the table.
And I agree, $2000 a year IS unfair. Over the air broadcasters don't have
to pay anything to broadcast to huge audiences over the public airwaves.
Webcasters were singled out for these new fees because "the internet is
digital" and the RIAA is scared of anything digital.
But even the SWA was much better than what was originally proposed! Under
the Copyright Office ruling, SomaFM would be paying $400,000 a year in
royalties! Under the SWA, we're paying 11% of our revenues or $2000 a year
minimum. For 2000-2002, this was $2000 a year for us. We haven't closed the
books for 2003 yet, but it will probably amount to $2500 for 2003. Still a
far deal better than $400,000!
We still need DMCA reform. There is no reason for all these artificial
barriers to webcasting. Non-commercial webcasters got a deal approved a
while back too, $250-500 a year sliding scale from 1998-2003. Non-comms pay
$500 a year for 2004 if they broadcast less than 146,000 ATH - the same as
an average of 200 concurrent listeners at any time, over that and it is
$0.00251 per aggregate tuning hour. It's about a fifth of what commercial
broadcasters pay. And if a non-comm is broadcasting more than 800,000 ATH a
month then it would make sense if they can qualify for the SWA to go with
those rates instead.
(see http://www.soundexchange.com/rates.html for all the details)
By the way, here's some quick math showing the royalties that would have to
be paid by internet broadcasters based on CARP (the recently approved
Copyright office royalties), using publicly available listener statistics:
Station ATH Last 7 Days Weekly Royalty Annual Royalty Source
AOL Radio@Network 6,001,917 $70,222.43 $3,651,566.30 (1)
LAUNCH 3,701,163 $43,303.61 $2,251,787.57 (1)
MUSICMATCH 2,380,394 $27,850.61 $1,448,231.71 (1)
SomaFM (All channels) 660,100 $ 7,723.17 $ 401,604.84 (2)
Virgin Radio Network 569,228 $ 6,659.97 $ 346,318.32 (1)
AccuRadio 193,357 $ 2,262.28 $ 117,638.40 (1)
Beethoven.com 8,861 $ 103.67 $ 5,391.03 (1)
Detroit Industrial 2,092 $ 24.48 $ 1,272.82 (2)
ATH = Aggregate Tuning Hours, also known as "TTSL" (total time spent
listening).
I tried to pick a broad range of example broadcasters.
Sources:
(1) http://www.arbitron.com/newsroom/archive/WCR02_10_04.htm
(2) http://shoutcast.com/ttsl.html (note, 30 day ATH listed, divide by
4.29 to get 7 day average) (these numbers are not audited and may result in
them being slightly higher than if they were audited by Arbitron)
--Rusty Hodge
-----Original Message-----
From: Brian Hurley <brian@xxxxxxxxxxxxxxxxxxxxx>
Date: Wed, 11 Feb 2004 16:38:35
To:Dave Farber <dave@xxxxxxxxxx>
Subject: A webcaster's take on royalty rates
Dave,
Rusty Hodge has provided a very one-sided and deliberately misleading
portrayal of Webcaster's opinions on the current and past webcasting
agreements.
Rusty is one of a very number of webcasters (less than 40 out of
thousands of station that webcast) who have signed the Small Webcaster
Settlement Act (SWSA). While Rusty was not one of the original
webcasters who negotiated it, he knew the details as it was being
negotiated, and he was its main public defender. He also receives a
free bandwidth subsidy from AOL, which is the only way he can afford
to pay the SWSA fees and continue broadcasting.
If you are interested in having my write a more detailed response for
your list, I would be happy to do so.
I am a small internet broadcaster myself and the Media Relations
Director for the Webcaster Alliance, an organization which has filed
a private antitrust lawsuit against the RIAA.
Regards,
Brian Hurley
Detroit Industrial Underground
http://www.detroitindustrial.org/
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