Webcasting in Crisis

On Thursday, June 20th, the US Copyright Office announced new "performance royalties" for all US webcasters, placing what amounts to a retroactive tax on all webcasters, including WFMU.

American webcasters who wish to provide programming must now pay an unreasonably high tax to the major record labels (as represented by the Record Industry Association of America) for every major label song they play, multiplied by every online listener who hears it.

Broadcast stations have never been asked to pay this performance royalty. (On the contrary, record labels have traditionally lobbied, bribed and paid radio stations to play their records. Believe it or not, many stations will now be charged for webcasting the same songs they are paid to play over the airwaves.)

WFMU (and most broadcast stations) have long paid the reasonable publishing royalties to songwriters and composers through companies like ASCAP and BMI. (Our annual publishing royalty fees are currently around $2000 annually.) These performance royalties are a new concept.

NPR stations (which receive money from the government) will be charged a lower rate than stations like WFMU (which receives no money from the government), and the fees for all NPR stations will be paid by the Corporation of Public Broadcasting.

Since the new rules were announced, many webcasters (large and small) have ceased their operations, and in coming weeks, many more will follow. On June 26th, Yahoo announced that it would stop streaming all local radio stations, including WFMU. (Our two streams from yahoo will quickly be replaced. See the "News" section at http://wfmu.org for details.)

The record industry's contention that it is only trying to receive fair compensation for their music is hard to believe, given that so many webcasters will simply go out of business. The record industry cannot collect fees from companies who cease to exist. How much will the RIAA collect now from Yahoo?

This is a matter of great importance to WFMU, since our financial health is related to our online broadcasts. Without the charitable contributions from our online listeners, WFMU would probably be facing bankruptcy right now.

Now the good news: since 75% of the music that WFMU plays is not subject to these new record industry fees, WFMU will be able to continue webcasting and archiving. But we will need to institute a few changes which some listeners (as well as some of our own DJs) may not be happy about. First, our streams and archives will no longer be recordable to a computer hard drive. Second, we will require ALL of our DJs to maintain online playlists, in order to demonstrate that three quarters of our programming is not subject to this new fee. Third, we will seek written permissions from independent US record labels who allow us to stream and archive their material. Our own DJs will still have the right to play whatever they want to.

There will be at least one more appeal to congress on this issue. When new appeals are underway, we will notify you of the exact information and the deadlines, and we will encourage you to contact your elected officials. Phone calls and letters to your elected officials are the most effective, but e-mails are better than nothing. There is a sample fax, and info on how to get your contact your federal representatives here, but remember, "cookie cutter" letters and e-mails are less effective than original, heartfelt letters and phone calls.

For now, rest assured that WFMU's webcasts will remain online. Station Manager Ken Freedman, June 26th, 2002

To hear Station Manager Ken's June 26th on-air listener phone-in on this topic, click here.

For further information, go to http://saveinternetradio.org

Recent e-mails from WFMU listeners and DJs on this subject:

Thanks for illuminating the webcasting situation this morning. These rules seem designed to help the big record labels continue their relentless dumbing-down of the product they offer, and big radio corporations like Clear Channel, whose CEO was quoted in a recent Chicago Tribune story as saying his company is doing listeners a favor by choosing music better than all those mom & pop stations ever could. Clear Channel, which owns about eight stations in the Denver market, has narrowed playlists to a common denominator even lower than the seeming rock bottom they reached 25 years ago.

Even the RIAA had to recognize the "O Brother" phenomenon at the Grammys, while the radio geniuses pretended that album didn't exist. Yet they keep telling us they know better than we do what we want.

I think the RIAA is afraid of good radio -- they want everybody to buy the music they play at home. Since I started listening to WFMU (my home computer, with cable Internet, is connected to my stereo, and I use the 128k stream), I've bought several CDs I never would have heard otherwise. But I rarely play CDs at home now because I'd rather let you guys pick the tunes. (You've shortened my attention span, too.)

I'll be writing my senator (again) about this, and I plan to send WFMU some money before long. Fight the power! -Listener Ken

Dear Ken, Thanks for spending the time this am on web casting.

Is it possible there is a bright side to this? No one can "stop the music" ( at least not all of it.) Are we about to enter an era where independent musicians and labels command the most attention relegating the major labels to a minority status?

For every "star" there are ten or more potential stars out there given the right breaks and publicity. If this ruling stands have the majors really started to dismantle their own business?

Is it possible that a new business model for the distribution of music will be created? -Listener Al

FYI, because of your discussion, I just called my two senators (one of them Kennedy, on the Judiciary Committee) and asked them to contact the Librarian of Congress to grant the appeal and roll back the rates. Thank you for your getting out the message. -- Jason

I know you think maybe the demise of other webcasters will eventually benefit us by bringing us more listeners, but I'm not certain it will work that way. It seems to me that the more webcasters there are, the more people will become aware of webcasting and the more they will tune in to webcasts and then there will be more overall web listeners and that is how our web audience could grow. Hope I'm being clear enough; basically I believe there may be a "critical mass" of webcasts that would attract listeners, and with too few options not enough people will bother tuning in. Maybe.

Also - I have a question: Do these new rules apply only to webcasters who operate within the borders of the US? That is, if I listen to BBC webcasts (which I do sometimes), is the US going to somehow force the BBC to pay up for the music they play?

I don't see how they could do that. So then the only webcasters who will be hurt will be the ones within our own country? Could we just move all the staff and facilities of WFMU to Andorra and get around the Library of Congress that way? - Bronwyn

Ken, Thanks again for the opportunity to voice my opinions on the air. I regret coming across as a "conspiracy theorist". However I really don't think that the bottom line issue is money. Nor do I think it is a partisan issue. I deeply recommend the recent book "Into the Buzzsaw" which illustrates the deep seated interest in keeping ability to broadcast (widely as the internet avails)potentially dissenting view. It has been documented that as early as the 50's the CIA was gaining huge share in the media giants which have only conglomerizing since.

For example the only way that it was possible to keep the story of a potentially dangerous milk-cow growth hormone of the mass media horizon was the coercion between the Fla. state court system and Monsanto (a huge drug co.). [story in "Into the Buzzsaw"]

I know this stuff sounds crazy and way out in left field. But there is a lot of documented material showing the connections between large media and energy companies (primarily oil) and government interests. And there has been a lot of ridicule of any dissenting voices of this.

I understand how this type of thing is unpalatable and most people don't even want to consider it as a possibility. Especially until it directly challenges their everyday life.

So, thanks again for your concerns and best of luck to you all at WFMU - I love your station and am very glad that you will still be around. -Listener Mark

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