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Kurt Hanson: “Bloody Sunday” decimates Internet radio

kurt hanson about canvasInternet radio’s landscape looks much different today than it did a week ago, due to numerous webcasters pulling the plug rather than paying the high rates of the Copyright Royalty Board’s (CRB) recent decision for 2016-20 royalties for sound recordings.

Yesterday, which I’m here calling Bloody Sunday, was a particularly bloody day for webcasting:

  • Pioneering webcaster Live365, which gave a voice to over 5,000 independent webcasters from around the world and which has been around longer than I’ve been in the field of Internet radio (i.e., since 1999), shut down its streaming servers for good on Sunday night.
  • Innovative webcaster Songza, created by a team of young entrepreneurs who sold out to Google last year (possibly as a successful exit, but also probably because their monthly royalty obligation to SoundExchange was significantly exceeding their monthly revenues), disappeared Sunday night as its features were absorbed into Google Play.
  • Leading webcaster Apple’s iTunes Radio, having debuted a couple of years ago amidst much fanfare as a potential “Pandora killer,” shut down its free access and moved behind a paywall (i.e., for Apple Music subscribers only) a couple of days ago. (For free listening, only its live Beats One channel survives.)
  • Pioneering entrepreneurial webcaster Val Starr, formerly of ChoiceRadio and now of GotRadio, quietly turned off U.S. access from the GotRadio.com website to all of her 48 channels sometime in the past week or two.

In addition, dozens of locally- and/or niche-focused webcasters, like Joel Salkowitz’s New York-based EDM webcaster Pulse 87 and Rick O’Dell’s Chicago-based webcaster SmoothJazzChicago.net have, also, already gone dark. Other independent webcasters that have been around for more than a decade, like Digitally Imported and SomaFM, are considering similar blocks. And I suspect there are many more shutdowns coming soon.

While these Bloody Sunday shutdowns are to some extent adding to the audiences of the surviving webcasters — here at AccuRadio, for example, our audience up 15% today compared to last Monday — the net result of these decisions is that Internet radio is in the process of losing much of its depth and diversity.

The cause of this decimation of Internet radio is the mid-December ruling of the Copyright Royalty Board (CRB) regarding royalty rates for sound recordings for the 2016-20 period. After over a year and a half’s worth of briefs, depositions, discovery orders, analyses by dueling economists, litigation, and millions of dollars of legal bills on both sides, the three CRB judges issued a determination in December that set a royalty rate of $.0017 per song per listener (which, as most of you know, is paid to an organization called SoundExchange for distribution to record labels and musicians). (Note that webcasters pay an additional royalty to the composers of songs, via the organizations ASCAP, BMI, and SESAC, which adds up to about 5% of their revenues and is not at issue here.)

Since the average small webcaster plays about 15 songs per hour, a webcaster with an AQH of only 5,000 listeners (Mon.-Sun. 6a-12m), which is tiny by AM/FM standards, would see a royalty bill to SoundExchange of over $900,000/year — far more money than a small, entrepreneurially-based webcaster could conceivably, in today’s advertising environment, bring in in advertising revenues.

Why? Because unless you have a large local (i.e., all in one city) or national audience, and correspondingly appropriate sales staff (as do local radio stations that stream their signals, and as do large national operations like Pandora), total available ad revenues — video, audio, and display ads combined — don’t equal $.0017 per song played. That leaves smaller webcasters the choice of either going dark now or going bankrupt later.

As for a large organization like Apple, that presumably might have had an AQH of 200,000 to 300,000 AQH listeners, that’s a royalty bill of $3 million to almost $5 million a month — which, again, is probably far more than the service brought in in ad revenues.

It’s not that smaller, independent webcasters don’t want to pay a reasonable royalty to labels and musicians. They do. But they couldn’t even participate in the CRB process, because the costs of participating were so high — I’m guessing, based on my experience, $50,000 to $100,000 in legal bills alone, plus massive amounts of time, energy, and distraction. So the CRB judges never even had a chance to consider their arguments.

Most of us who are still streaming have some kind of plan on how to cut costs, grow ad revenues, and survive. But for the rest, I believe it’s still possible for SoundExchange to offer a “Small Commercial Webcaster” license, as they did in 2007, to keep independent webcasters alive during this 2016-20 period.

Absent such a license, Bloody Sunday has left us with a far less diverse industry. And that’s a shame for webcasters, independent record labels, musicians, and consumers alike.

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Kurt Hanson

107 Comments

  1. This post said:
    >> “But for the rest, I believe it’s still possible for SoundExchange to offer a “Small Commercial Webcaster” license, as they did in 2007, to keep independent webcasters alive during this 2016-20 period.”

    Can you elaborate on why feel this statement is true? Besides a handful of petitions, what evidence do you have that would suggest an interest in doing this?

    To many, this seems like the goal “they” (meaning the judges & SE) set out to achieve.

  2. How is AccuRadio with it’s 975 curated channels spanning over 50 genres of music going to afford these rates if Apple can’t?

    • Kurt did not say that Apple couldn’t afford the new rates. The decision to take iTunes Radio into Apple Music probably has many factors.

    • Kurt says that most services will not survive but AccuRadio will. What does AccuRadio know that others do not? What is the secret sauce?

      • AccuRadio is one of the largest of the “Small Webcasters,” meaning that while our audience is still too small to get us a meeting at many large agencies and brands, we can get appointments at some. This helps us sell advertising at better CPMs than truly small webcasters could hope to. In addition, we spend a lot of time and money on monetizing our audience, including paying to have a full-time Ad Operations Manager on staff.

        • Still. If you’re having to pay $621 a day for just 1000 listeners (of which I’m guessing you have several channels of 1000 listeners) round the clock. Just for ONE channel that math works out to $621/day X 365 days a year = $226,665.00. Great CPMs or not, that seems like more than even a very well established small webcaster could ever afford. – For 10 channels (10,000 listeners) x 365 would be over $2.2 MILLION. That wouldn’t even qualify as a small webaster under the old SWA. Something doesn’t add up.

  3. Correction, it’s Pulse 87 not Pulse 97. And yes, he’s confirmed in press stating a reason for closer is a “close to a 2,000% increase in our royalty payments”.

    It’s also worth mentioning that the stream for Pulse 87 was hosted by Live365, and the sister station, Pulse 96.7 Vegas, is still on air as it is an FM broadcaster.

  4. Hi Kurt & Brad,

    Thank you so much for RAIN!! I’m curious when Kurt mentions ad revenue not equaling the royalty rates, is he factoring in just the three :30 second commercials that AccuRadio runs per hour?

    • Good question, Howard. I’m actually factoring in the potential ad units of a (A) a video pre-roll, (B) five or six audio ads per hour, plus (C) approximately 32 display ad units per hour (i.e., two ad units refreshed with each new song).

  5. I doubt the CRB will reconsider the plight of us small broadcasters.
    My thinking is this is the first step in the journey to getting radio stations to pay a royalty rate.
    Sound Exchange can claim a loss of revenue do to the loss of small package broadcasters now, and claim a need to make up the revenue. Not for them selves mind you but for the artest. I am also curious to know who has oversight of Sound Exchange?

    • Oversight of SoundExchange is established by federal law — a board of directors comprised of equal numbers of record label representatives and musician representatives

      • So it’s really all about the big labels running scared of the independents, and pushing their weight around. Why couldn’t you have pointed that out in the main article?
        Of course, the net result will be to drive webcast radio overseas, where more sensible arrangements can be made – if SoundExchange are charged by federal statute with representing the musicians, why are they breaching their own statute by refusing to do so? Cutting down the diversity of internet radio is a direct ATTACK on thousands of musicians all over the country, who should right now be banding together to form a class action case against them for the breach of federal law (i.e. their mandatory responsibility to represent performers) and the loss of income they will suffer (plus undoubtedly MASSIVE legal fees). The big labels can stand up for themselves – they have the means to do so.
        But then I suppose they might sell a few less records to people who swallow their lines about “mainstream” music being the only kind there is.
        In the end though, the internet is well designed to treat censorship as damage, and route around it.

        • This is all just by design. It’s lobbying. The people that participated in the rate setting are being paid off to create this monopoly.

          Just as Kurt pointed out, just in a single day his business was up 15%. Don’t you think that IHeart and the others want to see these increases. They are greedy to the max. They aren’t satisfied with taking over most of the listeners on the Internet. They want them all.

  6. Kurt fails to mention that his logo is plastered on the Live 365 homepage. Hence the increase in listeners.

    • Yes, true: That generous placement from Live365 is helping all six webcasters whose logos are displayed. However, I believe other webcasters are also seeing audience increases as iTunes Radio and other webcasters’ listeners are finding new homes. Furthermore, our audiences actually started increasing last week, subsequently to iTunes Radio going behind a paywall but prior to Live365’s shutdown.

  7. I’ve listened to GotRadio for the past 6 years and it’s a shame that SoundExchange is going to put a woman and many others out of business. Shame on SoundExchange!

    • Gotradio aka Pureplayradio can still be heard on SHOUTcast. Simply hit the play button. So, it’s still getting into the USA.

      • The GotRadio streams were still running on iTunes last night (February 1, 2016).

  8. Suppose small webcasters form a loose association; then the group members keep on streaming, but they all send the same annual payment they’ve been making to SoundExhange. They write on the check “for 2016 royalties” or some such. Meanwhile they contact their local Congressperson and Senator’s office and tell them what they are doing and get statements of support where they can. They begin with on-air announcements about the action and ask listeners to call and write their own representatives for support. The payment at the old rate was more than fair for artists (too much, methinks) and sending it in is clear indication of honorable intentions. Stand up in the face of oppression.

  9. I just did the math. At $.0017 per stream, a song would have to stream 1,000 times for the artist to receive $1.07. If the average webcaster plays 15 songs per hour, maybe he/she could cut that down to 5-10 and create their OWN material to share on their shows. But wait — that might be too much energy and time…..On average, when we (Partners ‘n Crime) record a song, it takes us 6 weeks per track (once a week three-hour recording/mixing sessions (@$50 per hour), plus mastering ($50 per track) to have it broadcast ready. CD production is another wad that usually breaks down to $3.00 per unit. At ten tracks per CD, that’s a minimal cost of $.30 per track (just for production). At $.0017 per stream, it would take 2 million streams to earn $0.34. As indie artists, we are still going into a financial hole for others to create their own shows, using our work. Sorry if I can’t shed a tear over this news.

    • It is .0017 per ‘performance ‘, meaning you multiply by the number of listeners. This adds up.

    • Tapia,
      Your math is recklessly inacurate. You are entitled to your opinion but make it an infomed one for crying out loud.

      2 million streams generates $3,400…not .34 cents. #facepalm

    • Tapia, I feel your indie pain. I don’t know abt. making more $$ on streaming, but you can cut overhead. Find great mastering at $10/tk (unless your mixes are really rough). And if your mixes are rough at $50/hr, find a different studio. CD’s can wholesale, with good to great artwork at $1.50/unit. Do some shopping on-line. Make some phone calls. I’ve made my best choices when shopping three or four vendors per category. The time invested will be worth it.

  10. Tapia, if that what it costs you to make a song, that’s your problem pal, you’re living in the fucking past and if you don’t know how to manage costs then many like me won’t miss whatever you think we need to hear.

    The audacity of people who know nothing about the music business, the promotion of music, the broadcasting of music to puke out such limp dick reasons for wanting to strangle legitimate broadcasters who shouldn’t be fisted to promote your shit, or… um, music (as you call it)

  11. Tapia –
    Why don’t you complain to SoundExchange as to why they don’t collect ONE penny from AM/FM radio stations (over-the-air). The only just started having to pay for their re-broadcasting over the Internet! By contrast, small webcasters have been paying SE the entire time. Further, it’s not that small webcasters aren’t willing to pay. They can’t afford these outrageous prices!

    But honestly, Sal is right, that’s on you to control your own costs while making music. At least your costs aren’t MANDATED! You can shop around.

    Finally, everyone is sick and tired of hearing artists like you complain! Oh, boohoo – you can’t afford another solid gold toilet for your 17 bedroom mansion? Oh, the sorrow! Give me a break!! Most artists are living million dollar homes and have more than one of them. Do you think small webcasters are living this kind of lifestyle? No – they simply just want to make a living. They have to watch every dollar.

    People like you and SE that sends out newsletters saying how they brought in more money last quarter than ever before make me sick!

    • From what I’ve learned about indie artists vs. mainstream artists, the ones in the million dollar homes are the mainstream artists like Beyonce’.

      • Exactly. I doubt this Tapia has sold millions of albums like Adele or Taylor Swift.

        • Whatever, she wants her music to be heard right? So, she should be all about keeping small internet radio alive because until she is as big as Adele or Taylor Swift, she’ll never be played on Iheart radio stations!

          Beyond that, every artist – independent or otherwise needs radio play to make sales. The sales translate into money for the artists and a lot of it. The royalties, are just the icing on the cake.

          • From what I hear, You Tube has become the new radio, especially for teens.

          • Putting out songs worth listening to is the key to success.

          • Bob Seeger’s Old Time Rock N Roll song best sums up how I and my friends (Music Lover, Idol Girl) feel about today’s music.

          • Fred,
            I don’t really care much if my music gets heard if there is no revenue stream attached. The days of people hearing music and then rushing out to buy it are gone. The general trend now is people do not want to buy music, but rather have access to it. If that’s the case, the payout model has to change. Otherwise the ‘airwaves’ will be filled with amateurs, using Garage Band and a laptop to record their off-pitch stuff.

          • The airwaves are already full of off-pitch people. Examples: Miley Cyrus, Justin Bieber, Taylor Swift, etc. The majors just sign them for their looks instead of their singing ability. That’s why Music Lover, Idol Girl, and I hate much of today’s music.

    • “Most artists are living million dollar homes” — this, of course, is preposterous. Most creators in any field strive to reach the middle, with a decent income that allows them to spend most of their time creating.

      • I seem to recall a show on MTV called “MTV Cribs”. The entire purpose of the show, which ran for several years, was to showcase popular artists multi-million dollar homes.

        • Key word there is popular. Most artists are like those you’ll encounter in your town’s local bar – middle class Americans who struggle to get by while the rich get richer.

    • Here’s an idea: Why don’t you guys write and record your own material, and then you can play it to your heart’s content, and not worry about spoiled brat, songwriters bothering you with asking for using their work.

    • TED
      “Most artists are living million dollar homes and have more than one of them. Do you think small webcasters are living this kind of lifestyle? No – they simply just want to make a living. They have to watch every dollar.”

      Most artists I know live like many small webcasters, including myself. Don’t know where you got that idea, unless you need to believe that to justify not paying artists for their work. If you had a store, would you expect manufacturers to sell their products at a loss, so you could have some fun selling them?

      • Exactly. Most artists are like those you’ll encounter in your town’s local bar – middle class Americans who struggle to get by while the rich get richer.

  12. All mainstream artists started out as indies at one time or another. So, not sympathizing with Tampia. As Ted and Sal mentioned, that’s on her to control her costs.

    • Ted, Sal and GJ
      The budget I shared with you is pretty standard. Some pay more, some pay less, and it shows in the quality of the music. My job as a artist, is to do justice to the music — not figure out how to do a Wal-Mart special. You may not be interested in my genre (and I don’t really care), but you will never be able to say I produce anything that does not sound professional. If you want to hear it, just google my name and music. Otherwise, I think we’re done here.

      • Google is gonna be the only way anyone will hear your music because the small webcasters in this country will be off the air. Good luck.

  13. Good article Kurt. Fortunately Radionomy fills in for what I lost when Live365 was murdered and its streams went dark. I was with Live365 for fifteen years … they will be missed.

    • Still unsure on Radionomy, as they clearly do not pay SoundExchange. How are their streams not forced to geo-block?

        • Not trying to be a troll, but how is SoftRockRadio covered by SoundExchange with their statement on the site? Legitimately interested, as I’d like to start my station again as well. SABAM doesn’t look to have reciprocity agreements with SX.

          “Soft Rock Radio. All streams fully licensed through radionomy.com, an officially licensed ASCAP, BMI, SESAC, SoundExchange, SABAM & SOCAN site. Any and all licensing inquiries or requests should be directed to Radionomy SA.”

          • The guy you can email about that is named “SoftRock Dan” and his email is comments @ softrockradio.net.

          • According to this article, Radionomy has an agreement with SoundExchange. evolver.fm/2012/09/18/radionomy-get-paid-for-being-awesome-at-music/

          • The thing is, there’s gossip on internet forums, such as here, that they don’t pay SoundExchange, but I have searched Google and there is no evidence on the internet to back up that gossip.

          • Exactly right, Soft Rock Chick. I take such rumors with a grain of salt.

          • you can clearly see who pays soundexchange each quarter. Radionomy hasn’t been listed on there for quite sometime.

          • Me as well, Music Lover. I’m very skeptical about such claims.

          • This is the official radio stream of an artist I like. I very highly doubt he and his record label would set up a stream on Radionomy if Radionomy was doing anything not legit.

            radionomy.com/en/radio/jimbrickmanradio/index

          • “SoftRock Dan”‘s sister station, called GoFM, posted the following information concerning Radionomy on his Soft Rock Radio Love chat board:

            “Radionomy was recently purchsed by Vivendi. Vivendi itself owns a number of record labels around the world, including MCA, Capitol and Mercury. I don’t believe they’d be in the business of stealing from themselves or their artists.”

            “They demand that all music comes from a legal source and that if it is used on their service, particularly if it is uploaded to their servers, it cannot be used for any other purpose. In other words, I can’t upload a song on this station from a CD, then use that CD for any other purpose, such as mobile DJ. They’re pretty strict.”

  14. I suggest getting Tunein. Plenty of great stations hanging in there and it is a fantastic app and facilitator for small web broadcasters! My favorite stations is Digutal Mayhem Radio, kick butt gamer channel with awesome shows and Dj’s!! As to the artists, guess what pretty sure they appreciate a fraction of some royalty instead of ZERO royalty they are now getting from the small web stations! Money in pocket is money to help pay for the next studio session/cd production/gold toilet or triple Mocha Chino Soy Latte Double Half Caff with Whip for crying out loud! Specially for artists in fringe genre’s or original and parody that do not get air time on terrestrial (Over Air stations) or Satalite stations! Some is better than none; go back to second grade and watch sesame street!

    • Dragon, unfortunately, Tunein Radio is US-based, meaning anyone broadcasting on there is subject to the outrageous rates they now want. So, you will be seeing your favorite small web stations disappearing from there shortly.

      • Richard. One thing you miss about tunein is that the are only a facilitator. IF the stations are not in the U.S. they are not subject to th ruling! Only U.S. based stations and those with in U.S. Controled out lying properties, protectorates and grantorships. Still, SOMETHING is more than NOTHING at all. The major artists will notice the LARGE DENT in their walets sooner or later! the Independents and fringe genres already are! I happen to volunteer DJ for a station out of the U.S. its still rediculas what they have done! They are trying to run out webcasters and independant artists… though 99% of mainstreem Popular artists started as independents! Just sad!

        • I doubt the major artists will notice much difference. They have the larger companies (Spotify, Google, Apple, etc.) plus AM/FM radio, plus stations overseas.

          • And the major artists also have satellite, in addition to all that.

      • Dragon is correct. Tunein is a search engine with links to radio from all over the world, including AM/FM radio.

        • Yes, that is right. But, I’m based in the U.S. and had three streams on there. Do you think they won’t come after me if I’m not paying these outrageous rates?

          • …I’m on Radionomy now. But, even on there (Belgium-based), I’m not even going to tempt fate by listing on a US-based “facilitator.” Radionomy now has an office in California.

          • The point is, they’ll come after you but not the search engine itself.

          • Idol Girl, Soft Rock Chick, and I have done our part by signing every petition there is regarding the situation. Because we are not very optimistic that the situation will be fixed, we’ve been searching for stations overseas that play easy listening oldies. It’s hard to find such stations, even on the internet as it’s not “hip” or a “party” style music.

          • The more accurate term Idol Girl and Dragon means is a directory.

          • I’ve signed a couple of them myself. But, I’m afraid three or four thousand signatures isn’t going to turn any heads.

          • It especially won’t turn the heads of our Do-Nothing Congress, specifically on the Republican side.

  15. As someone who is about to launch his own online project in the U.K, I feel the pain of my fellow U.S small webcasters.

    But, as someone who’s worked with musicians and producers, I also agree with Tapia.

    Webcasters on the whole are happy to pay, but at a fare rate, reflected by well structured licencing. The short sightedness of CRB and SoundExchange, will ultimately be uncovered in there 2016 reports, issued in early 2017. And I’m suspecting it’ll show a sharp drop in licencing payments, as a result of CRB’s recent ruling.

    Here in the U.K PRS and PPL support small webcasters with there LOML (Limited online music licence). Sure the terms are a little crazy, with PRS saying you can earn less than £12,500 and be covered by LOML, whereas PPL limit you to less than £5,000 on there basic licence. But at least we have some cost effective licencing.

    But for the listeners of U.S webcasters forced to geo block there own country, it isn’t all that bad. You can always sign up to Tunnel Bear for free, and listen via a VPN outside the U.S!

  16. Tapia:

    Re: “My job as a artist, is to do justice to the music…”
    You operate off a false premise that, just because you want to make a living as a musician, every note you play has worth and you should be able to make music your career.

    1) You want exposure to grow your fan base but don’t admit the road to exposure is through a variety of outlets, which include online radio play.
    2) You give no value to a station programmer who, playing your song for the first few times, has no idea if your music will become a draw or cause listeners to tuneout.

    Until an artist becomes a draw, a recognizable name that the audience tunes in to hear, the artist gains more from exposure than the station gains from playing their songs. (Why should you be paid the same royalty rate as a group like Lady Antebellum, when your have not proven your worth as that group has?)

    There is a line to cross where an artist’s music is worthy of payment. Prior to that line the artist gains more from the airplay than the station does in giving that artist exposure.

    • Ken Dardis
      You seem to have missed my point entirely. I don’t care as much about making a living on music (most of my income is as a qualitative research analyst), as much as I care about getting fair compensation for my creative work. As I said before, times have changed, and hearing music no longer motivates (many) people (including fans) to download or otherwise purchase music.

      I do respect programmers, especially those who list my plays on Spinitron. I just have no use for anyone who wants to use other people’s creative work to make money or build their own reputation as a webcaster/podcaster/DJ. As to your comparison to Lady Antebellum, I should be paid the same royalty rate as any well known name, because my music is filling at least three minutes of airtime, which if the music wasn’t there, the webcaster would have to think of something creative and engaging to say.

      • You’ve failed to answer the question concerning your song being exposed to a new audience. “my music is filling at least three minutes of airtime” serves no purpose if the song has listeners tuning out. Be specific on this if you can.

        Follow Val’s words. She and I have been in this fight since the inception of online radio and agree: “We now live in a world where scores of talent is no longer restricted to the big record deal in the sky.” Increase competition for exposure is reason for your song having the value of a kernel of corn in a silo.

        “I just have no use for anyone who wants to use other people’s creative work to make money or build their own reputation…” That shoe fits on the artist’s foot, too. Programmers create a product – radio – and people like yourself want to use it to expand your fan base.

        • Ken Dardis
          Wrong again. The model for music has changed. It used to be as you say, but now with a market that feels entitled to free music, few are motivated to download singles or purchase CD’s.

          I’m not looking at expanding a fan base of pirates. For the most part, our (Partners ‘n Crime) business plan is to get our music placed on TV or motion picture. Music Supervisors mostly pay attention to what’s on Americana FM. There might be a few who listen to internet radio, but for the most part, those guys are looking for electronic or new-age stuff. So, for that opportunity, we not only accept there may not be much monetary reward unless a song takes off, we even pay a promoter to get out material uploaded into the station’s control rooms.

          Several comments here insinuate or flat out say my music is probably not that good, but our EP was 118 in to 2015 Top 200 in the Roots Music Report, and two songs made it to 68 and 78 (all in the folk genre).

          After doing this for a few days (comments, bantering and reading), I’m thinking perhaps webcasters have not figured out how to monetize their projects. I mean, if people don’t want to buy music, they certainly won’t want to pay to listen to a radio show. Thoughts?

  17. Tapia:
    I’ve read your posts. At first, I was giving you the benefit of the doubt that you actually had a brain. However, after your continued posting, I am convinced you are a complete dumb ass. Pardon my language.

    You’re either:
    1. Incredible stupid
    2. A puppet put here by SoundExchange.
    — If not both.

    To begin with, you come here ranting and raving about the rates. Then you give a mathematical example in which your math was completely incorrect. Someone pointed that out to you. Instead of acknowledging it and realizing that the costs really do add up for artists, you just continue to bash small webcasters.

    Next, you said you don’t care if your music is heard. But then you say you want to spend a lot of money to make it sound professional. What for? You obviously are a liar. You, like all artists that make music want it to be heard. To claim otherwise is just ludicrous on your behalf.

    Finally, you lost all credibility here by saying “google” your music. You’re just here to promote your sorry recordings that now one gives a damn about.

    • Lisa,
      Thank you for your comments. Your animosity is quite intriguing, and indicative of one who lacks maturity, so there’s that. I suggested googling because I didn’t feel like posting my band page.

  18. An open letter to Tapia and other “misinformed” indie artists

    My name is Val Starr, and I’ve been streaming since inception. I’ve rallied for Webcasters rights and have been to Washington twice to lobby for fair royalty rates. I’ve bootstrapped my little company and for the last 12 years, it has provided a decent lifestyle for myself and family. I employ a dedicated part-time staff of exceptional programmers who, like myself, live, breathe and eat music on a daily basis. I am also an independent blues artist, and being one, am in the unique position to understand and respect both sides of the equation. I am proud to tell you that GotRadio has supported many independent artists and helped them achieve some level of success.

    Webcasters are not unlike traditional radio, both being essential in providing invaluable promotional support for music artists. With that said, there is no doubt that the music industry business model is in flux. I believe the major labels are largely to blame for not embracing the new digital download model but instead saw the opportunity to “tax” the webcasters. This new tax was above and beyond the publishing royalties that both terrestrial and internet radio were already required to pay and with the recent increase is now many times greater than the total sum of our entire yearly revenue. So essentially, instead of enjoying a break from the distribution and manufacturing costs of putting out a CD, and figuring out a way to profit handsomely from digital downloads, the record labels decided to go for the webcaster’s throats. We are staring at our own extinction in less than 20 years of existence.

    If I had a crystal ball, I would see the future of music in “leasing”. People will no longer own music, they will lease music through subscription services such as Rhapsody, or Spotify. I acknowledge this, and see the value in making sure that services like the ones I mentioned provide accurate and fair compensation to the artists. But there still remains the challenge of discovering new music. How are new artists exposed to the world? Without independent webcasters like GotRadio, I fear that only a handful of radio conglomerates will remain and only a small percentage of well financed artists will rise to the top. It’s almost as if we are turning back the hands of time to another era, when hits were bought and paid for. (btw I was also an independent radio promoter for 15 years and was witness to how airplay was bought.)

    I can say with some certainty that Sound Exchange is not the “enemy.” They are trying to get the most for their members. But just think how profoundly simple it would be for SX to extend the SWSA (Small Webcasters Settlement Act) and allow small webcasters to continue in business, pay affordable, fair royalties that are in line with their actual revenues and continue to promote all the incredible, diverse independent music that is rapidly emerging. We now live in a world where scores of talent is no longer restricted to the big record deal in the sky. A world where professional quality home recording software and other technical advancements are available and affordable to musicians. Indie artists should rally with indie webcasters. We are on the same side! The time is here for the independent artist, independent label and independent webcaster. Spread the word. #saveinternetradio.

    • Val Starr
      Thank you for posting the only intelligent response to my comments. I can’t say that I disagree with most of your well written analysis. The only point I differ with is IMHO most people no longer care about discovering new music. For one, there is plenty of it out there, and listeners mostly want something that fits in the background of their lives.

      Needless to say that is in an of itself tragic, but it seems like since Napster, more and more people have internalized an attitude of being entitled to music. The only way I see to change that paradigm is to stop offering it up for free, because it provides exposure, that offers little else.

      • Bob Seeger’s Old Time Rock N Roll song best sums up how I and my friends (fellow posters – Music Lover, Idol Girl) feel about today’s music. Mostly what we buy or listen to is oldies.

    • Totally agree with what you said about the major labels. They are turning themselves into dinosaurs by not embracing new technology.

      In regards to subscription services, it seems that streaming is headed that way. I’ve been thinking about which one I would subscribe to. Since I buy a lot of my music via iTunes, Apple Music appeals most to me. Supposedly you can listen to your iTunes purchases while away from your computer with their Apple Music app.

    • For my friends and I (Music Lover, Soft Rock Chick), our musical formative years were before the internet came along. In addition to TV and AM/FM, we would learn about new music through word of mouth and browsing the CD store.

  19. Talia, you said: “As indie artists, we are still going into a financial hole for others to create their own shows, using our work”
    Here’s some math: My punty internet station cost me $60/month in royalities for up to 4,000 total listener hours (lets leave off the additional streaming/hosting/internet charges, as well as the cost to buy the music to play in the first place). With a punty station as mine, someone willing to buy ad time to run is in short, laughable.
    Your song is rotation. May get heard over 100 times in a month. You might make a sale or two every other month thanks to the Amazon link, PLUS, a share of the royalties, maybe punty. Me? I’m out $60+ hard actual dollars. Every month.

    Now lets talk about musicians. The key for success in the music biz is being in the right place at the right time. Actual talent is secondary. The vast majority of the most talented musicians never get a shot at fame or $$$. I for one feel bad about this, they should be rewarded. But there are just so many gifted and not-so-gifted competing for the same limited shelf space. If this weren’t the case, all musicians would be rolling in dough.
    So with this being the case, why would you scoff at internet broadcasters, who, out of their own pockets, brought additional shelf space for you to sell your wares?

    Wise indie artists ARE shedding tears over the disappearance of 5,000 Live365 stations last week — many of whom were all about highlighting indie artists. The ones (or the one) NOT shedding tears, apparently, are behaving like fools on the internet.

    ps: I’m sure readers in this thread wonder about your stance on the royalty rates for AM/FM stations broadcasting over the air who pay tens of multifold times less royalties — in short, milking the life out of your creative work. Shouldn’t they, too be subject to the same $60/4000TLH rate as us puny people? If so, where’s your outrage? In order not for you to be a hypocrite, they too, need to be priced out of the market.

    Good day.

  20. Not quite understanding the math in this article. By my calculations the small webcaster pays like this: 15 songs * 18 hours * 365 days * 5000 listeners * $.0017= $837,675

    Plugging the 200,000 to 300,000 listeners for Apple into this equation, their cost would come to 33 to 50 million.

    Just curious if the other factors (songs per hour or hours per day) change for Apple or was there was just a mathematical error in the article. Thanks

    • . . . or, to bring the math down to a personal level. I am willing to contribute (and have . . . love ChillTrax). But . . .
      15 songs * 24 hours (not sure why the article said 18, as ChillTax is 24×7) * 1 listener (me) * $0.0017 = $223.38 / year.

      Then, as others have pointed out, you still have infrastructure costs (servers, network and such).

      So, a small broadcaster either has to go subscription at $18.62 /month (say 19.95 to help defray server costs, or maybe even $24.95).

      For one station.

      Ouch.

  21. LIVE 365 WAS MY GO TO EVERYDAY FOR LAST 5 YEARS A COUPLE OF THEM YEARS WALKING THE TRACK WHILE RECOVERING FROM MANY OPERATIONS AND SOME LIFE THREANING ONES. tHIS REALLY WAS A HURT 365 HAD GREAT STUFF SO DOES ACCU RADIO BUT MY FAVORITE IS NOW GONE @60 PLUS I DON;T NEED MUCH BUT DON;T KEEP TAKING THANKS

  22. This will destroy the last remaining enclaves of high quality, original, programming, e.g., Radio Paradise.

    Sound Exchange: how can a room full of smart people become one big idiot?

  23. Dan, easy, they have to have a back room deal with some one and it seems like it is with the AM & FM stations and the ruling judges who can give them a fix somewhere down the road.

  24. My favourite small webcasting radio station will soon close down. It provided oldies and yester-charts so it ran deeper than many commercial oldies stations around on the web. For me this will be another Day The Music Died, after the ones in 1967, 1974, 1980 and 1992. West-Europeans know pirate offshore radio stations never got substituted, and an investigative DJ preparing a show on musical history is a hard-to-find person. Corporate America is showing again liberty is a question of money only.

  25. With the RainNews summit taking place this week, I wonder if the matter of Small Webcasters will come up? I understand Kevin Goldberg spoke about it but it was rather unflattering.

  26. This is all a bunch of crap for the rich to get richer and screw the general public, small business and artists. I thought we lived in a democracy!! A-hole lawyers and over legislation is killing this country. Un-F’nbelievable!

  27. Reading over these comments is quite disturbing. The amount of entitlement bespeaks a cultural devalument that it’s hardly surprising to see the US going down the track it is.

    The main argument of webcasters is that they are “doing a favour to the artist” by broadcasting their songs.

    You may be absolutely right.

    But the thing you overlook is that IT IS NOT YOUR SONG! The artist decides where he wants his song played, and if you are not paying him what he wants, you don’t get to play it. It really is that simple.

    All the arguments about “Well, then the artist has less exposure and makes less money” is all blah blah blah. That is the artist’s problem, not yours. And it isn’t your place to intervene and decide for the artist how he deals with the problem.

    I actually had no problems with small broadcasters having a reduced tier of royalty payments. But the thing is, you don’t get to make that decision for me. I do. If I choose a higher royalty and fewer people want to pay it, that’s my bad, but it’s my bad to make. Not yours.

    You enjoy your hobby of broadcasting. Fine. Good. More power to you.

    Are you demanding reduced internet fees because you have a small audience? A discount on your computer hardware? Did you go to Radio Shack and negotiate half-price on your microphone because “Hey, I’ve only got 10 people listening to me”? Of course you didn’t.

    Lose the entitlement mentality. Artists owe you nothing. Any favour you’re doing by broadcasting an artist’s music is because they are letting you, not because you have a “right” to. And if an artist doesn’t want you to, if an artist wants you to pay a certain rate, pay it or don’t play it.

    • @ VAL STARR…Thank you for being an intelligent voice of reason amongst so much chaos. Your comments highlighting the missed business opportunity by the big record labels could not be more on point.

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