Music interests successfully use webcast hearing to push on-air royalty issue

Paul Maloney
November 29, 2012 - 12:40pm

It was clear that many members of the House Judiciary subcommittee weren't interested in hearing about Internet radio's problems during yesterday's hearing (see our coverage here).

[SomaFM's Rusty Hodge has posted audio of the meeting online here. We should also point out that Tom Taylor has excellent and extensive coverage of the hearing in his Tom Taylor Now newsletter here, as does Inside Radio here.]

The meeting was to discuss the Internet Radio Fairness Act legislation intended to bring relief to an industry whose most successful representative remains unprofitable and paying more than 50% of its revenue in music rights. But music industry witnesses and their allies on the subcommittee deftly turned the spotlight elsewhere: the fact that broadcast radio does not have to pay royalties for sound recordings it plays on the air.

The maneuver perhaps revealed just how difficult it will be for IRFA-backers to gain any ground while the "radio royalty" issue remains unresolved in the eyes of the record industry.

In recapping yesterday's House Judiciary subcommittee hearing on the Internet Radio Fairness Act, ArsTechnica concluded:

"Overall, to say Pandora's battle appears to be an uphill one would be a serious understatement. Its main ally is the terrestrial radio industry, which has become a 'bad guy' to many in Congress. And the list of opponents is growing to include not just the entertainment industry but also unions and interest groups, both liberal and conservative... the AFL-CIO, the NAACP, Americans for Tax Reform, and the American Conservative Union all opposed the bill...

"In the meantime, the Internet radio industry—which essentially consists of just one large player—will continue to be a losing bet."

Read Ars Technica's recap (also the source of the boom box photo) here.

Paul Maloney
November 29, 2012 - 12:45pm

Martha's Vineyard's "eclectic-folk-alternative" WMVY is one of broadcast radio's webcasting pioneers. About the time the station was purchased by Joe Gallagher's Aritaur Communications in 1998, WMVY became one of the nation's first with an online stream.

The station in fact developed on online brand of its own, "mvyradio." While on-air the station remained an ad-supported endeavor, the online mvyradio went commercial-free, supported by the non-profit Friends of mvyradio.

Yesterday WMVY/mvyradio announced it will sell its broadcast signal to Boston NPR-affiliate WBUR, ending nearly 30 years of broadcasting to the Islands, Cape Cod and south coast.

Station staff and Friends of myvradio have launched a campaign to keep the station alive online (eventually returning to the airwaves as a non-commercial broadcaster). Their goal is to raise $600,000 by the end of January.

"It’s an ideal scenario which will require significant fund-raising, but we’re committed to making it happen," Gallagher said. He remains Aritaur's president/CEO, and is also managing director at Angel Street Capital, which is focused on investing in digital media start-ups.

For five years Jennifer Lane managed sales for Aritaur's radio stations. In her Audio4cast blog, she expressed her confidence in "the power that a community has to save things that it values," and is betting Friends of mvyradio will reach its goal and maintain the station's unique brand online.

Check out mvyradio.com here. There's local coverage of this story in the Vineyard Gazette here. And read Lane's Audio4cast here.

Paul Maloney
November 29, 2012 - 12:45pm

Artists, special interest groups, and industry organizations continue to choose their side of the line regarding Internet radio royalties.

Several conservative organizations have written Capitol Hill in opposition to the Internet Radio Fairness Act, the bill that seeks to bring webcasters' royalties more in line with those of other forms of digital radio. The bill has been slammed by the American Conservative Union, the Taxpayers Protection Alliance, Americans for Tax Reform, and Citizens Against Government Waste. CAGW president Thomas Schatz wrote, "While we agree with the basic premise that all [digital radio] services should be treated equally, it should be under market-based standards. It is imperative that Congress protect intellectual property rights, and allow the free-market to work in pricing negotiations."

Read more in the Salt Lake Tribune here and in CNet here.

Meanwhile, the largest federation of unions in the country, the AFL-CIO, has also voiced opposition to the bill.

Yet the group Americans for Limited Government group is supporting the IRFA. The group's president, Bill Wilson, conceded that the bill isn't perfect (here), but that it would indeed help "end unfair, anti-competitive royalty rate discrimination."

Read more in the National Journal here.

The Internet Radio Fairness Coalition (here), meanwhile, welcomed eight new members for its effort to gain support for the IRFA: Triton Digital, Senzari, HD103.com, TruLocal Media, Musera Radio, Digital Sound & Video, Pearadio, and Mark Ramsey Media. [RAIN publisher Kurt Hanson is also CEO of webcaster AccuRadio, a member of the IRFC, and he's spoken on the group's behalf.] 

Finally, at least one artist is speaking out for webcasters. While 125 recording stars signed on to an open letter advertisement panning Pandora and its efforts, (here), Patrick Laird (a member of the band Break of Reality) wrote in an op-ed in The Hill: "It is clear that the effectiveness of internet radio with regard to both product sales and promotional power is overwhelming, and the success and expansion of these companies are of the utmost importance for the future of our group. Internet radio creates an unparalleled opportunity for us to reach millions of people who otherwise might not discover music like ours."

Read Laird's full essay here.

Paul Maloney
November 29, 2012 - 12:45pm

A company called SoThree, founded by three former Google engineers, has unveiled a new smartphone app for the 94 million or so in the U.S. who can't read a newspaper while driving to work. It's called Umano ("human" in Italian).

Umano's team chooses about 15 news stories a day from the web, which its team of voice actors reads and records (material that's "geeky (which is code for techy/gadget stuff), scientific, entrepreneurial, and inspirational," according to PandoDaily.com). The company hopes to expand its coverage to 100 articles a day over the next six months.

Now, if the software could incorporate local weather, traffic, and sports, they might really be on to something novel!

PandoDaily's (pretty unironic) coverage is here.