Radio pays: Will webcasters wind up in court?
When last reported ["Phat fees: The day the music died?" August 22], webcasters were about to be hit by enormous royalty fees for broadcasting music over the Internet.
From the online stream of Charlottesville's own eclectic WNRN 91.9 to sites devoted to just one genre, on-line radio owed seven cents per song per listener retroactive to 1998. The rates meant tiny stations might owe thousands of dollars in back fees and faced future royalties well beyond their incomes.
With Internet radio sites shutting down left and right and lawsuits coming from all sides, a possible solution arrived in the form of a bill before Congress. H.R. 5469 was designed to stay the royalty fees for six months while a better compromise between webcasters, artists, and the recording industry could be reached.
Unfortunately for shoestring radio operations, the bill that showed up at the House several weeks ago was vastly different from the initial version. For one, its original one paragraph had swelled into a 28-page document.
It seems the Recording Industry Association of America (RIAA) and a small group of webcasters had redesigned the bill to include far reaching fee systems. While creating a loophole for many small-budget operations, the revised bill left over 90 percent of webcasters still paying what they considered enormous royalty fees. Webcasters were unhappy.
"A big fat thanks to record execs," Rolling Stone wrote sarcastically in an ad in the New York Times last week. "Because of you, millions of kids will stop wasting time listening to new music and seeking out new bands. No more spreading the word to complete strangers about your artists." Not that RollingStone.com is about to shut down over the royalty fees, but the magazine's website has been streaming 45 channels.
Other Internet radio stations went ahead and called it quits. Under the heading "Silenced by Royalties," The Radio and Internet Newsletter website lists almost 150 webcasters that have shut down recently in the face of potentially enormous payments. The S-O-S Save our Streams website reports on almost 70 educational and community websites no longer streaming. (Still available at presstime: Vegas tunes at lvrocks.com and tunes for truckers at roadstarradio.com.)
But while a revised bill sailed through the House, it came to a surprising halt in the Senate. Although it had major industry and Senate support, the bill ran straight into Senator Jesse Helms (R-NC). Helms, forever famous in arts circles for scolding art he found obscene, stepped in to oppose the bill. Citing concern for small webcasters and the fledgling Internet broadcasting industry, Helms blocked a vote until the Senate reconvenes after the coming elections.
The move leaves fee schedules up in the air. Stations will pay a minimum of $500 to tens of thousands of dollars a year, depending on their size and for-profit/non-profit status. There's also that whole business of the data collection. Right now, the industry wants information ranging from the UPC code of a retail album to its release year to the date and time a listener logs into the station. Many webcasters think that the song, album, artist, and label should suffice.
Regardless of the final legislative decision, getting webcasters to follow through might be difficult. While Soundexchange.com (the RIAA's fee-collecting division) lists an address where checks can be sent, it's hard to imagine that its mailbox is jammed.
So far, WNRN seems unaffected. "We haven't gotten a bill from anybody," says station manager Mike Friend.
If the fees stay low, though, Friend says the station will consider paying them, depending on how much Internet listeners contribute to the non-profit station.
"We'd have to check how much contributions from the Internet are. If it would be more than what we collect from it, there's no point in keeping it up."
As far as the data collecting goes, Friend sees it an impossible task.
"These legislators pass these laws, and there's no way to supply that information," he says. His view on providing it? "There's the courthouse, and there's the judge, and if you want to subpoena it, then we have to provide it."
So until legislators reconvene in November, one answer to the present problem is to sit on it and let the RIAA and lawmakers come knocking. As country musician and broadcaster Mike Hays told the British publication The Register, "A large number of webcasters are going to engage in civil disobedience. Most people are going to say screw the RIAA, let them come find me."