I've always had a tough time understanding the actions of the Recording Industry Association of America. Artists and fans alike resent its looming, god-like presence over the music industry, and yet the crucial problem of saving the crumbling industry is by default the RIAA's to grapple with. It's unfortunate that every step the RIAA takes to save music from a currently precarious position - riddled with declining sales and rampant filesharing, seems just a self-serving stumble.
One of the last vestiges of progressive music consumption, free-form Internet radio, is now feeling the brunt of the RIAA in quite possibly one of its most absurd moves yet.
At its behest, the government's Copyright Royalty Board has ruled to significantly increase the royalty rates that popular Internet radio services such as Pandora and Live365 have to pay for songs that users listen to. This move will undoubtedly put many of these services, which already walk a financial tightrope relying on advertising revenues, out in the cold.
These web-only radio providers operate in a variety of different ways, ranging from Pandora and Last.fm's à la carte method of hand-tailoring a station based on a user's specifications, to networks like Live365 and SomaFM, which webcast straightforward (yet not necessarily less eclectic) stations based on genre selection.
Since July 15, christened by some as The day the music died,"" all of these websites have had to pay $0.0008 in royalties every time a listener happens upon a song, and by 2010 the proposed rate will gradually go up to $0.0019 per song. While it may not sound like very much money, consider the fact that around 60-70 million people listen to music on the Internet in the United States. It quickly adds up.
This issue, like many facing the music industry today, is very complex, and I certainly can't hope to cover everything here. Nonetheless, if Internet radio providers can't manage the rate hikes and end up closing down, it would be a tragic outcome. They are among the most relevant modern methods for music to circulate, and moreover, they seem to be the only conceivable direction for the future of radio in today's Internet-driven entertainment culture.
Why is the RIAA essentially cutting off such a viable source of airplay? It's truly baffling considering the music industry has always relied on radio for publicity and the fee they pay and less people are listening to standard broadcast radio now than ever.
I imagine it's simply another backward move in a long line of many, intended to squeeze out any and every profit possible in the supposed interest of artists, regardless of larger implications. In actuality, it seems most artists are recognizing that the minor royalty payments they'd receive from Internet radio aren't nearly as valuable as the exposure these Internet stations provide, not to mention their accompanying links to Amazon to facilitate purchases.
As Princess Leia once said, ""The more you tighten your grip, Tarkin, the more star systems will slip through your fingers."" I think that really gets at the heart of the matter: As the RIAA attempts to solve problems by clenching a tighter and tighter fist around revenue, it instead finds itself losing touch with and alienating the industry it's desperately trying to save.
There is hope, however. Since late April of this year, millions of listeners have been contacting their congressional representatives to voice support for Internet radio, which has led to the creation of the Internet Radio Equality Act. As what will possibly be the first victory of many, SoundExchange - the RIAA-sanctioned group that represents the major labels' interests - has agreed to negotiate slightly more reasonable royalty rates and to freeze the current rates while decisions are being made. Internet radio still walks on thin ice, but at least now it has a chance.
Had it up to here with the big, bad RIAA? Vent your frustration to bpeterson1@wisc.edu.
