Below is an email I just sent out to the Radio Dismuke mailing list. (If you wish to be on that list to receive updates about the station and the Internet royalty crisis, you may sign up on my website at www.RadioDismuke.com ) Please help - and please pass this on to anyone you know who values or supports Internet radio.- - - - - - -
At the end of this email is an URGENT message that the SaveNetRadio.org has put out and which I support. This Sunday, July 15 is the day that the new royalty rates become due retroactively and will drive most webcasters into bankruptcy.
Not only are the per-song per-listener rates themselves very high, on top of them are a $500 per channel "administration" fee that will be ruinous for my service providers Live 365 which hosts around ten thousand channels and LoudCity which hosts around five hundred. All of these fees are retroactive to January 2006. In the case of Live 365, it means that on July 15 they will immediately be in the hole for about $5 million just for one year's "administration fees" alone. Live 365 was founded a few years ago during the dot.com boom and only turned its first profit ever last year - and that profit was only a few thousand dollars. Live 365 simply does not have millions of dollar to fork over.
LoudCity is in a similar situation. Not only will they owe about $250,000 in "administration" fees, they will be force to pay per song per listener rates for all of 2006 a year that they had every reason to believe would have been charged on a similar basis as the old royalty rates with perhaps a reasonable increase. For them, their SoundExchange royalties under the old rates would have been capped at $2,000. Their royalty bill from my stream alone is now going to cost them well in excess of $2,000 and, when one multiplies that by 500 stations, the bill will have RETROACTIVELY jumped from around $2,000 to into the HUNDREDS of thousands of dollars. Based on my knowledge of the rates they charge their customers, my guess is that LoudCity took in CONSIDERABLY less than $180,000 in TOTAL revenues last year - not even enough to pay the "administration fees" which are being retroactively applied to them.
As I have explained in previous emails, this is all part of an effort of the RIAA to effectively take over Internet radio by killing off the existing players so that the major labels can sign "sweetheart deals" with hand picked webcasters who will be charged less than the statutory royalty rates in exchange for playing the lowest common denominator mass market recordings currently found on FM radio and from which the four major RIAA labels derive most of their revenue. This is nothing more than a disgusting effort to use a very flawed law that the RIAA lobbied for in order to kill off emerging competitors (independent artists and niche genres which, thanks to Internet radio, were able to receive radio air play for the first time ever) in order to prop up their technologically obsolete business models.
As of right now, both of my service providers, Live 365 and LoudCity have said that they DO plan on remaining on the air after the July 15 deadline passes. From what I gather, the attitude that both will be taking is that, since they will ALREADY be effectively bankrupt as of July 15, they have absolutely nothing to lose that they haven't already lost and will keep broadcasting while attempting to fight it out in court until they receive a court order that forces them to shut down. I have no way of knowing for sure how long such a process will take - but so long as they are fighting this, I will continue to provide them my streams of 1920s and 1930s popular music and jazz. Other webcasters, for a variety of reasons, are not quite as gutsy as Live 365 and LoudCity in this regard and plan to go out of business as of July 15. When that happens, a MONSTROUS injustice will have taken place - and many will lose their businesses, their incomes and, in some cases, even their homes. The ONLY thing that webcasters are "guilty" of is playing music and artists that the RIAA labels would prefer that you not be aware of on grounds that it might diminish interest in the artists and music that they want you to be listening to and purchasing.
The recent Day of Silence was EXTREMELY successful in terms of the number of people that contacted Congress. Congressional switchboards and faxes were jammed from the very large number of calls from the hundreds of thousands of concerned Internet radio listeners who called in. Unfortunately, the RIAA is a VERY powerful organization with LOTS of political pull and many bought and paid for politicians in both houses of Congress. At last count 127 members of the House have agreed to co-sponsor the Internet Radio Equality Act which would set Internet radio royalty rates on par with those charged satellite radio and resolve the whole situation. There IS a significant amount of support for our cause in Congress. But, in order for it to do any good, the bill has to come to the floor for a vote. That can be a very difficult thing as it is not hard for opponents of a bill to kill it off in committee. That has essentially what has been happening since the otherwise successful Day of Silence.
Another factor is that SoundExchange, the royalty collection organization founded and controlled by the RIAA is sending out very false and misleading information to members of Congress - most of whom are NOT scholars in the complicated issue of copyrights and royalties. For example, the head of SoundExchange yesterday distributed an email to members of Congress suggesting that it has offered to cap the $500 minimum fee to $2,500 per service provider. That is VERY misleading. The offer on the part of SoundExchange to cap the fee was ONLY good through 2008 AND required webcasters to agree to give up all future efforts to lobby Congress for changes in the law. No webcaster in his right mind would agree to such a thing - and, in the long run, what good is it to effectively AGREE to go out of business in two years and voluntarily forfeit one's right to petition Congress for redress of grievances? The ONLY reason that SoundExchange made such a bizarre offer in the first place was to provide window dressing so that it could tell Congress that it was "working" with webcasters and that it is the webcasters who have turned down their alleged offers of benevolence. This is the nature of the sort of organization that webcasters are up against - and, as of right now, it is very close to achieving its goal of shutting down all Internet radio except for a handful of RIAA sanctioned operators.
SaveNetRadio is requesting people to IMMEDIATELY contact ALL of their Senators and Congresspersons TODAY and urge them to support the Internet Radio Equality Act and to bring it up for a floor vote IMMEDIATELY. They are asking Internet radio fans and supporters to not quit until they feel that they got their message across very clearly. If your representative has already co-sponsored the bill, please thank them for their support and ask them to please push for the bill to be put up to a floor vote now BEFORE the July 15 deadline goes into effect. If you have already contacted your representatives in support of this issue - you have my profound gratitude. If it is all possible, please do so AGAIN in order to stress the importance of bringing the issue to a floor vote.
Here is where you can go to look up the name and contact information for your Congressperson and Senator:
http://www3.capwiz.com/saveinternetradio/alert_9738601.html Your support on this is appreciated not only by me but by may many, many listeners who depend on Internet radio in order to hear the music that they love - music that is NOT available on FM radio and will NOT be available on the Internet for much longer if the RIAA achieves its goal of transforming the Internet into a carbon copy of FM.
Below is the plea from SaveNetRadio.org
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URGENT URGENT URGENT
IMMEDIATE ACTION NEEDED FOR THURSDAY, JULY 12TH
Time and options are running out for Internet Radio. Late yesterday, the U.S. Court of Appeals DENIED the emergency stay sought on behalf of webcasters, millions of listeners and the artists and music they support.
UNLESS CONGRESS ACTS BY JULY 15th, it is the end of the road for Internet radio.
We are appealing to the millions of Internet radio listeners out there, the webcasters they support and the artists and labels we treasure to rise up and make your voices heard before this vibrant medium is silenced.
This situation is grave, but that makes the message all the simpler and most serious. CALL YOUR SENATORS AND REPRESENTATIVES RIGHT AWAY and urge them to support the "Internet Radio Equality Act." If they've already co-sponsored, thank them and tell them to fight to bring it to the floor for an immediate vote. If the line is busy, call back. Call until you know your voice has been heard. Your voices are what have gotten us this far -- Congress has listened. Now, they are our only hope.
TELL THEM.
We are outmatched by lobbying power and money but we are NOT outmatched by facts and passion and the power of our voices.
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The exact page of the SaveNetRadio.org website that allows you to look up Congressional office phone numbers is here:
http://www3.capwiz.com/saveinternetradio/alert_9738601.html