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Small webcasters rocked by licensing issues

Last week we began receiving notes from webcasting clients of two large hosting companies, Radionomy and StreamLicensing, noting that recent changes and communications had troubled their webcast stations. The two situations are coinciding in time, but are unrelated to each other. However, both are about music licensing.

Radionomy Streamlines Its Streams

At Radionomy, one station owner told us that voice announcements appeared in station streams notifying customers that station listening in the U.S. would be limited to Radionomy-owned players — in other words, the Radionomy.com website player, and the Radionomy mobile app. In the Facebook group for Radionomy producers, station owners complained that they did not receive notice from Radionomy before the change was implemented, and noted that their traffic metrics showed sharp drop-offs in U.S. listening as a result of the presumed geoblocking in non-Radionomy apps. Since some stations must maintain a baseline of listening hours to qualify for Radionomy hosting, some owners feared losing their stations.

Radionomy told RAIN News that streaming has indeed been restricted in some 3rd-party platforms. “By this restriction Radionomy is focusing the distribution on company’s proprietary channels and curated 3rd party channels,” Radionomy said. Streaming continues normally in the Radionomy players plus iTunes, WinAMP (owned by Radionomy), connected devices, and smart speakers.

Why? It’s about the cost of music in the U.S., a tenacious business problem for all stakeholders in the American small webcasting ecosystem since the expiration of protective legislation (the Webcaster Settlement Act of 2009) on December 31, 2015. At that same time, a higher webcast royalty rate paid by webcasters to labels was set by the Copyright Royalty Board, the second blow of a devastating change in how small webcasting is regulated. As a result, this from Radionomy: “Radionomy needs to slow down the proliferation of the multiple platforms distributing Radionomy Stations streams due to the important increase of the US Music Rights cost.”

In a bit of added context, Radionomy said that advertisers are less interested in non-Radionomy distribution apps, so monetization of Radionomy’s ad-supported business is more difficult through them. Hence the concentration into Radionomy’s house-owned apps and iTunes.

StreamLicensing Grapples With Licensing

At about the same time StreamLicensing, a competing webcast host, had its hands full with disgruntled station owners and a broken contract with ASCAP, one of the world’s largest Performing Rights Organizations (PROs) which represents songwriters who partially own a significant portion of recorded music played on internet radio.

The station owners heard from ASCAP first, notifying them that StreamLicensing’s ASCAP license had been terminated by ASCAP, and inviting station owners to “obtain a discounted, easy-to-administer license agreement directly from ASCAP on ASCAP.com.” The communication was both surprising and baffling to some, and probably unwelcome to all, as the StreamLicensing host plan includes music licensing. Few if any station owners wish to enter into direct contract with a royalty collection agency, or take on the administration tasks required to license music.

ASCAP asserted that StreamLicensing had breached its license, and failed to pay for some (undisclosed) licensing period. StreamLicensing disagrees, and told RAIN News that the company had been inaccurately billed for royalties for “streaming elements that were not applicable to royalties.” CEO Anthony Michael Hernandez told us that he had hired an independent auditing firm with extensive music licensing experience to examine the situation, and also brought on a software development team to join the review.

Hernandez said he believes the PROs might owe money to StreamLicensing, not the other way around. He called ASCAP’s action “bullish” and “vicious.” In a communication to station owners, Hernandez said, “StreamLicensing has been working with representatives of the performance rights company regarding what we believe is an inaccurate data count that impacts what we pay to ASCAP. That matter has not been resolved but the unilateral action was taken anyway. We are in the process of reaching our ASCAP contact and urge you to stick with us as we work out a satisfactory resolution that protects you and your streaming service and the legal rights of our company.”

ASCAP sees it differently, confirms that it terminated the StreamLicensing license on June 30, and that StreamLicensing can not provide ASCAP licensing to station owners as of July 1. ASCAP stated that any claims that the PRO acted inappropriately, or outside its rights, are false. In framing a public statement, ASCAP reflected its representation role to songwriters and composers: “We very much appreciate that customers of Streamlicensing.com value the creative work of the songwriters and composers whose music they use on their services, and we regret that they are being inconvenienced by Streamlicensing’s breach of the ASCAP license. That is why ASCAP is working directly with Streamlicensing’s customers to make the transition to an ASCAP license as smooth as possible.”

Conclusion

 

While station owners might have legitimate complaints with how licensing issues have been communicated and remedies implemented, the cost of music for small-business webcasting (which is often semi-pro or hobby webcasting), and the built-in complexity of multiple music stakeholders, are regulatory facts that settle into all levels of the webcasting ecosystem, from Spotify and Pandora to a hobby internet radio station. As was the case in late 2015, as the Small Webcaster Protection Act neared expiration, a collective and organized lobbying effort seems like the best hope of improving the business conditions for small webcasters and their hosting companies.

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Brad Hill

40 Comments

  1. Share? It’s more like “Thanks for advertising our music, at no cost to us, to help increase our sales… now while you’re at it, pay us for that privledge”. This situation is out of hand.

    • Thanks for the comment Jeff. I’ll just note that “increase our sales” has lost a lot of meaning, and will continue to.

  2. Classic example of shooting oneself in the foot. I’ve been echoing Jeff’s sentiments for the last 6 years. That’s when we shut down 7 streams thanks to legalized “reverse” payola. Simply couldn’t cover the costs to “advertise” others’ wares.

  3. I would encourage everyone to make pirate radio stations as soon as possible. Because ASCAP has chosen to be a big bully on top of Sound Exchange’s ridiculous rates since the Small Broadcaster Agreement expired, the music industry deserves a Napster style punch in the nose for how they’ve treated small broadcasters.

    • I’ll leave your comment, despite its advocacy of illegal activity. Respectfully, the “punch in the nose” you recommend might not even be noticed. That’s not an insult; I’m just putting the marketplace in a different perspective. The major label royalty market is mostly comprised of the major streaming services. Pandora alone contributes over half of SoundExchange royalty collections. The labels need to hear that large numbers of constituents (listeners, artists) care about specialty webcasting. This takes long-term organizing, targeted to the Copyright Royalty Board process. The next CRB decision comes in December, 2020. The Washington D.C. process starts about two years before. That means now is the time to begin planning, organizing, raising funds to participate in the litigation, recruiting esperts to testify, conducting consumer research, building artist groups to advocate.

      • Well said and succinctly put Brad. Indeed time is nigh to begin rooting some grass for “small” independent webcasters for 2018 CRB hearings. Thing is, it’s an extremely enormous & expensive effort to “herd cats” if you will… coupled with a very different landscape today.

        I was a participant in the “grassroots” coalition(s) that descended upon Capitol Hill in 2007 & 2012. Major savoir success in 2007 resulting in the SWSA (small webcaster settlement act) and a reprieve in 2012.

        That said, back then, small webcasters basically rode on the coat-tails of Pandora’s big but desperate bank roll with hired (lobby firms) guns, DiMA, and RAIN’s megaphone. Given that Pandora is now exponentially bigger with even bigger fish (issues) to fry today, I don’t see them joining the party this time around. DiMA? Maybe..worth a plea I guess.

        Not saying it’s not worthwhile for a concerted effort starting now…it’s just the starting block$ have been moved waaay back for small (hobby to <1.25M revenue) independent webcasters. Film at 11 as they say……[sniff]

        PS. Thanks for the reporting and great piece.

  4. The goal here is very simple: To get rid of free streaming, and replace it with some form of subscription streaming. The music industry, from the artists to the writers to the rights owners all are saying the same thing: Free music will kill the music industry. So they view any free stream is freeloading. As Brad Hill says, streaming doesn’t lead to sales. Streaming is a replacement for sales. People are streaming, and not buying. So someone needs to pay for the music, and I’m sure the advertising isn’t covering the royalty fees. You can see what the major streamers, like Apple, Spotify, and Pandora are doing. There’s a reason. The artists don’t need webcasters. They can do it themselves.

    • If the goal is to get rid of free streaming, then what about FM radio? That’s free music and most stream online.

      • “what about FM radio?”
        They pay royalties for their streaming just like webcasters. It’s a loss leader for most of them. But they’re not complaining. Small webcasters are.

        • The BIG reason FM Radio is not complaining BIGA is that they are not paying– ANY royalty whatsoever on the sound recording on their OTA broadcasts.

          Webcasters pay both songwriter/composer royalties (ASCAP, BMI, SESAC) and sound recording royalties (SoundExchange). The difference is staggering my friend. Today, FM radio’s exemption in this space is the epitome of an un-level playing field and in relative terms…one of the biggest rip-offs of the past 30+ years. ptooey

          • “The difference is staggering my friend.”

            Did you not know that when you started your station? The law was written almost 20 years ago. This is not a new problem.

          • I was looking on Save Internet Radio Facebook page. They had an article about Fair Play Fair Pay Act gaining momentum but facing uphill climb.

            www(dot)variety(dot)com/2017/biz/news/fair-play-fair-pay-radio-royalty-act-gains-momentum-1202462359/

        • And just for the record, FM radio “complains” a shit-ton. They’ve done so regularly for decades via the NAB’s Capitol Hill lobby muscle.

      • Most small webcasters I’ve listened to (mostly American, some are located in other countries, though) are individuals doing webcasting as a hobby, trying to keep certain genres of music alive, many of which exist solely on donations from a small handful of listeners.

        Many FM stations I’ve listened to, on the other hand, are owned by large media companies, which explains why they aren’t complaining.

        • You’re right Beth…I’m based in the U.K. and try our best to service U.K. Smooth Jazz fans…Sadly, I think we’ve reached the end of the line!

  5. What I’m pissed off at is the lack of transparency at Radionomy. For almost two weeks, producers have been in the dark about the new policy implemented by Radionomy management. No one had a clue what was happening. I’ll be moving my stream somewhere else. You get what you pay for….or in this case what you don’t pay for.

    • Streamlicensing is definitely the same as Radionomy at this juncture. When the ownership of the company changed hands from an individual to a corporation, they inundated us with regular updates regarding where we were in the transition.

      Since the transition, this situation has clearly been brewing with ASCAP, but we heard nothing about it, until ASCAP took the initiative to reach out to us. Regardless of if ASCAP’s intentions (yes, very likely a “pay or else” bullying tactic), we still should’ve heard about it from SL first!

  6. I’ve been with Radionomy for several years now. From the very beginning I figured they were more like a radio pyramid scheme. All the listeners of the free broadcasters eventually end up at the top “Radionomy Owned Channels” I say this because they messed up their own RMO so stations couldn’t tell how many listeners they have so the numbers could be manipulated. This and other problems always came about evaluation time causing stations to lose listeners. I’m guessing Radionomy owned stations were rock solid during these times and the wondering listeners would simply listen to their station. I’m pretty sure the latest geo-blocking and announcements to go to radionomy dot com to listen to this station is the final phase of their plan of directing all listeners to their own stations. Then comes discontinuing the producer ran stations.

  7. Radionomy=incompetence, lack of support, lack of transparency, manipulated numbers and a totally disrespectful attitude to producers. Yes, it´s free and we get what we pay for, but there are some other superb free services online that work as should and at least have a word of support to users. And they lied in the past telling us they paid royalties for us. Shame on you Radionomy.

  8. I was just reading posts on the Save Internet Radio Facebook. Could these issues be a connection with the destruction of Net Neutrality?

      • And if we did make a profit, we’d have to report those profits on our required month-end submission, and if we made “too much” would get bumped to the next level which means our monthly cost goes up.

  9. As one of the many radio producers on the Radionomy platform (and StreamLicensing before the giant price hike) I’m surprised to hear the reason’s why our streams are bring limited in USA from a news site before Radionomy. This says a lot about what Radionomy thinks of its core / user base… NOTHING.

    Thanks so much for digging into this and reporting on the problems.. we all here at Radonomy would still be in the dark with out you.

  10. a great list of browser testing options from FreelanceFolder here, so I’ll just add that in-person testing, on your own PCs & Macs, is also a highly

  11. Here’s what’s especially angering to me:

    The very first Internet radio station I was on in 2004 instilled in me “We’ve got to pay royalties! We want the artists to get paid for their work, and of course we also don’t want to get fined/shut down!” This was back when we had two large lists, one from ASCAP and one from BMI, and we had to search those lists before we played any artist to either make sure that artist was on that list, or else we had to reach out to them directly and ask if we could play their music; back then it was especially hard to find contact info for your favorite artists, and even less likely you’d hear back from them the bigger they were (READ: NO TWITTER!).

    Despite that logistical nightmare (and thankfully the rules loosened up as time went on), every project I’ve headed since then has been legitimate, and I’ve lost DJs because of it: What do you mean my tags have to be right? What do you mean I can’t play the entirety of Dark Side Of The Moon? People aren’t going to wait an hour to hear requests. F THIS, I’m going to XYZ Pirate Radio who don’t require any of this!

    I’ve also not been able to carry many syndicated shows because they come as 1 file with no song titles, and even if they provide a playlist (which they were often lax on), it was just too much strain on my time to be able to upload those in a timely manner because of the manual effort still involved.

    Through all of that THIS is now how I’m repaid. I’ve labored/slaved over a station for 10+ years, put a lot of money into it that I’ll never (nor did I ever expect that I would) get back, and I’ve now got to scrap it all because the alternative is being fined for non-compliance, something I’ve worked hard to avoid since 2004.

    • I could not have said this any better. This is exactly my life as well. The DJs that backstab you because you wanted to do it by the book, the diligent reporting, the conformity in website design … all of it. I am hanging it up because I have just had it. Been doing Internet radio since 2003 and have had to deal with the continuing licensing and broadcasting rules constantly. It is just no fun anymore.

  12. I am reminded of an old Vietnamese proverb: “When elephants fight, the grass is trampled”.

    I am an internet broadcaster. I play music I am passionate about. I have a small audience, which I’m satisfied with. I am willing to pay for the privilege, and I do. I pay royalties via StreamLicensing, but more than that, I buy all the music I play. If I have to pay ASCAP on top of what I’m paying StreamLicensing, that works out to the price of one album a month, roughly. I can deal with that.

    What I am bothered by is getting caught in the middle of somebody else’s dispute. I have StreamLicensing in one ear, telling me one thing, and ASCAP in the other ear, telling me something else, and I have no idea who to believe. If I pay what ASCAP is demanding, I am defeating the whole purpose of having StreamLicensing in the first place, as well as weakening StreamLicensing’s position if they’re the ones in the right. On the other hand, if I tell ASCAP to jump in the lake and go on as I have been, I’m putting myself at risk of fines and legal action. I’m seriously considering just stripping every ASCAP-published song out of my playlist until something gets worked out, and hoping for the best.

    And that’s where the grass-trampling comes in. I play a lot of well-known songs by popular artists who wouldn’t notice the difference if I went away, but I also play a lot of small artists, artists who work at the level where every new pair of ears that hears their song is a victory. And as I mentioned, I buy all my music, so everything I play has generated at least one sale. If I wasn’t doing this, I probably wouldn’t buy a third as much as I do now. I did the math, and if I’d saved the money I spent on music over the years, I’d have enough for a new car, and a fairly nice one. And let me tell you, a lot of bands and labels really appreciate it. So as usual, the major players who have access to the big media and large-scale promotion and distribution machinery get taken care of, while the little guy loses yet another option.

    So, I don’t know what I’m going to do, but I’ve got ten days to figure it out, I guess. Sigh… maybe I’ll just pack it in and buy that car instead.

  13. I’m in the business on the artist promotion side, while I don’t full understand the challenges of small webcasters, maybe I’m not understanding the sentiment here, but I do get the idea that the majority of sentiment is that the people commenting above, wanna be able to play, stream artist’s music without paying to do it. If they don’t pay for some sort of license , then how’s the artist gonna make money? Sales aren’t what the were, for the small artist now its all about royalties. In the modern age of fake news or fake media, anybody I guess can make a webcast, and by spinning their own music or their buddies alot give the appearance of importance, but what does this accomplish for the general artists who aren’t their buddies?
    At least with FM radio, which might shadow with the simul webcast, we artist promoters have a program director, to send material too. Those stations that are organized report to charts, the number of spins and so forth. Yes any small web-caster can do this too, but in my experience they don’t.

    I will say, each and every time I’ve been solicited to send a package to a small web-caster, its been a waste of postage stamp.
    Yes maybe everybody can have some sort of hobby web streaming thing, but once they start trying to make money with ads, then its a business. So I don’t hear much sentiment for the artists, thats what I wanna say. The small casters can organize themselves better IMHO.
    I don’t know what the fees are, most articles like this, don’t show the fees small casters gotta pay.

    • The small webcasters I listen to play oldies. I can’t think of any charts that shows spins for oldies.

    • This is a station my family and I used to listen to when we first discovered internet radio. http://www.joy995.com On the station’s now defunct website, they explain that they had to shut down because the fees they pay became unaffordable. That’s the issue many small webcasters like that station are facing. Many of them are zero profit operations, done strictly for the love of music that is no longer getting mainstream radio airplay.

    • This is a station my family and I used to listen to when we first discovered internet radio. www(dot)joy995(dot)com On the station’s now defunct website, they explain that they had to shut down because the fees they pay became unaffordable. That’s the issue many small webcasters like that station are facing. Many of them are zero profit operations, done strictly for the love of music that is no longer getting mainstream radio airplay.

    • Hi Ralph. Thanks for your comment from an alternate perspective!

      The exact fees right now are $59.50 a month or $714 for a year. This is up from about $240 a year which is what I started 10 years ago with no addition or reduction of services provided in that time.

      Now with ASCAP on board, we’ll be pretty close to $1,000 a year and allegedly we’re responsible for our own record keeping (songs played, how many listening during the song into TLH calculation), something which we’ve paid Streamlicensing and precursor companies for. Now we’re paying more for less service, will be spending more time organizing and reporting records, with more chances of making a mistake that will get us fined — no thanks!

      I’m also lucky on cost because I have a friend who’s a webhost that provided me with free webspace and another friend who designed the site for free. The expenses are even higher for any station that pays a webhost and designer (squarespace), and a station I’m closely affiliated with took it a step further and they pay a host monthly to have a remote box that only has legally obtained music on it and all their DJs have to Skype/remote in and DJ from that box to reduce any chance of music piracy. They’ll be closing down this weekend too.

  14. Let’s face it. Radionomy has become the Trump of internet radio. Canada looks more and more interesting, for radio broadcasting and otherwise…

  15. I’m just a listener. The station I listen to has no ads, and pays more in fees than they get as contributions from people like me. They can barely afford to operate their station as it is, paying StreamLicensing to handle their paperwork, etc. This is simply going to be too much work and expense. It’s either a fantasy on the part of middlemen (who’ve apparently been snorting too much coke paid for by the talent and purchases of others for too long) or a pure power play. It certainly can’t be about the pittance that even the exorbitant fees would amount to in their bottom line. Somebody needs to grow up and recognize that the people who pay non-profit licenses aren’t the ones ruining their business model. They should look at themselves and the fact that they’ve had it so good in the past.

    • Hi Sherry
      One of my streaming partners called ASCAP and asked them that. They replied saying that there is, however they would not give out the name of that company. I’m sure it’s more beneficial for ASCAP to have our direct business than to go through a proxy which strips some off the top.
      Needless to say, me and my partner ceased operations at the end of July because we didn’t want to be pawns in this game.

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