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The Librarian
of Congress's decision on Internet radio royalty
rates is due on Thursday,
June 20th. Hopefully that decision will
be a reasonable one and we can all get back
to business!
So on Monday, June 24th, look for a special
"Back to Business"
issue of RAIN, featuring a review
of products and services now available to our industry.
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YOUR firm! Call Kurt at 1-312-527-3879 or e-mail us here.
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BY PAUL MALONEY
Though witnesses at yesterday's House subcommittee hearing
on the CARP process were short on concrete solutions, the resounding
chorus of those who testified was that the government's compulsory
copyright determination system is "broken."
In fact, in his opening comments, subcommittee member Chris
Cannon (R-UT) (pictured at right), alluding to the CARP's
recommendation on webcasting
royalties, said the process could result in determinations in which
"Congress's intent (is) violated."
Witness Bruce Rich, an attorney
with the firm of Weil, Gotshal, & Manges, said the CARP process needs
"radical surgery."
Yesterday, members of the House
Judiciary Committee's Subcommittee on Courts, the Internet,
and Intellectual Property heard experts in the field tell them the
process can be prohibitively expensive
and needlessly prolonged, and
often results in determinations
that are unfair and highly
inconsistent from decision to decision.
Probably the most echoed criticism was that of the impractical
cost of many of the CARP determinations. Subcommittee member Howard
Berman (D-CA) (left) illustrated this by citing determinations
that cost parties tens of thousands of dollars, that resulted in royalty
payments of "about ten dollars."
The Copyright Arbitration Royalty Panel, or CARP, was instituted
in 1993, to replace the older copyright determination body, the Copyright
Royalty Tribunal. Under the current system, arbitration panels are
formed by temporarily appointed "experts in the field,"
as opposed to permanent government staff.
The process, questioned before, has been under the most intense
scrutiny yet since an arbitration panel's
recommendation on webcasting royalties was handed down late in February.
That recommendation would have had Internet radio webcasters paying
royalties that in some cases amounted to three to four times their
annual revenues.
The Librarian of Congress, Dr. James
Billington, rejected that recommendation last month. He
will announce his royalty determination by June 20. Last month, the
House subcommittee called for yesterday's hearing to investigate the
problems with the system (see RAIN coverage and background
here).
Subcommittee member Rick Boucher
(D-VA) (right), also apparently alluding to the CARP determination
on webcasting, illustrated the problems of consistency in determinations
by pointing out that
the notion of fairness was even
a standard considered in that decision. He went on to suggest the
idea of transferring the responsibility of copyright determination
to a US District Court. He argued that panels that consist of temporary
and often ill-informed members end up "constantly reinventing
the wheel," and making the process prolonged, and the final decision
inconsistent.
Subcommittee chairman Howard Coble
(R-NC) reminded the panel from time to time that the hearing was to
focus on the "CARP process" itself, and not the results
of a particular panel. Even so, Cannon couldn't resist asking Register
of Copyrights Marybeth Peters,
one of the hearing's witness, about a particular element of the webcasting
issue.
Cannon asked Peters if her office did in fact agree with the
idea that webcasters should be exempt from the §112e compulsory
fee for "ephemeral recordings." Peters acknowledged that
she did, in fact, see no economic value of ephemeral recordings, and
that
webcasters should indeed by exempt from these royalties.
Peters (left), in most of her comments, seemed to make it clear
that see is no fan of the current CARP structure. Though she didn't
think she'd support the notion of assigning the responsibility to
a "rate court," Peters admitted that review by the Copyright
Office might be unnecessary to the process. She told Chairman Coble
that "the CARP system in place now has got to work better."
The other witnesses who participated were Robert
Garrett (of the law firm of Arnold & Porter) and Michael
J. Remington (Drinker Biddle & Reath). The written testimony
of the participants is to be posted on the House Judiciary Committee's
site here. |
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BY PAUL MALONEY
As reported by Portland, OR-based ratings service Measurecast,
more and more people are spending more and more time listening to
Internet radio stations that report to its ratings
service, even though there are fewer and fewer webcasters participating.
Given both Internet radio's increased media exposure in
recent months regarding the controversy of proposed webcasting royalty
rates, and the continued uncertainty facing webcasters, that trend
may in fact be indicative of the industry as a whole.
This week saw the release of both the Measurecast May "Internet
Radio Report," and the May "Arbitron
Webcast Ratings" study.
Measurecast reports that in May about 4.3 million people
tuned in to stations on the study's panel for a combined total of
over 38 million hours listening hours (up from just over
34 million hours in April).
That's up more than ten percent from the 3.9 million listeners
reported in April.
That increase may have been even greater had Measurecast's
panel not dwindled for the second month in a row.
Measurecast says it measured 1,294 stations in May, down
from 1,351 in April, and 1,414 stations in March.
The obvious question is whether webcasters dropping from
the Measurecast panel are simply no longer participating in the
company's studies, or are indeed ceasing streaming.
Measurecast Communications Director Sven
Haarhoff gave credence to the idea that what his company
is
seeing is representative of the Internet radio field as a whole.
He says those webcasters no longer reporting have indeed silenced
their streams.
"There are always a few stations that drop because
of technical problems," he told RAIN, "but there
is of course the uncertainty over the royalty rates, the depressed
economy, and the problem of very little revenue that's making some
webcasters put their streaming on hold until it makes good business
sense."
He illustrated his point by mentioning the recent revelation
that Entercom had
been dropping stations streams prior to their decision to silence
them all (see RAIN coverage here
and here). He
also mentioned that several stations in the LMiV
group, as well as those streamed by 'Net radio solutions provider
Loudeye, have recently
pulled the plug.
Steady at the top
Both reports show Scottish Media Group's Virgin
Radio UK maintaining its top spot in the rankings with 1,321,500
Average  Tuning
Hours (according to Arbitron), 1,589,396 TTSL (according to Measurecast).
Another British outlet, Jazz FM, was second in both rankings. However,
Measurecast's numbers show Jazz
FM has an even higher Cume than Virgin (229,363 to 201,240),
meaning more people overall tuned in.
Clear Channel maintained its dominance in the "network"
ratings in both studies (a "network" being the combination
of all of a company's or aggregator's streams). The broadcast group's
199 AM and FM streams totaled second-most in Arbitron (7,582,500
ATH), and tops in Measurecast (7,310,581 TTSL, nearly double of
that study's second-largest network, Radio Free Virgin's 3,714,258
TTSL). Live365.com was
Arbitron's top network, with 8,420,800 ATH.
Internet radio has a place for Jazz
Jazz and/or Smooth Jazz seem to be only gaining in strength
as a favorite among online listeners, a marked contrast
to broadcast radio. Four of Arbitron's top 25 ranked stations are
Jazz outlets: (#2 Jazz FM 927,800 ATH; #5 KPLU
413,500 ATH; #18 JazzRadio.net
168,300 ATH; and #21 KKSF
156,700 ATH).
This trend was reflected in Measurecast's rankings as well.
In addition to Jazz FM (1,226,769 TTSL) and #31 KKSF (142,798 TTSL);
#32 ChoiceRadio
Smooth Jazz (141,969 TTSL) and #40 KNIK
(121,612 TTSL) made the Top 50.
Note that Shoutcast, in its rolling 30-day summary, is currently
reporting a 797,168 TTSL for its third-ranked SmoothJazz.com
webcast, JazzRadio.net at #23 (168,885 TTSL), and Top
Shelf Jazz at #26 (148,961 TTSL).
Independent webcasters can
play with the big boys
Florida-based webcaster RadioIO
made an impressive debut in both studies at #10 (260,800 ATH Arbitron;
284,313 TTSL Measurecast). This is especially impressive when noting
that RadioIO -- like 3WK, RadioMargaritaville, Digitally Imported,
WolfFM, SomaFM, and MEDIAmazing -- ranks up with the large companies,
yet is a small independent operation with just two or three staff.
See the May Arbitron Webcast Ratings here,
Measurecast's May Internet Radio Report here,
and Shoutcast's TTSL Report here.
You can also always see the latest ratings by following the appropriate
links in the left-hand menu of the RAIN homepage.
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BY PAUL MALONEY
Chicago-based FullAudio, the music technology and licensing
company appointed to handle music subscription
services for Clear Channel
radio stations, has successfully raised $13 million in their latest
round of financing. The company's is goal is to raise a total of
$17 million.
That information is from a story in yesterday's edition of
"The May Report,"
a newsletter which covers the Chicago online business scene.
May Report publisher Ron May
said he could not disclose the actual source of his information,
and added that the
Chicago-based music technology firm CEO Chris
Gladwin would not reveal the source or sources of the
financing before the funding round is over.
According to the report, this latest $13 million is in addition
to $20 million FullAudio
raised in previous financing rounds.
Gladwin told May that he believes his company is the dominant
player in subscription-based, personal music services field. FullAudio's
"Music Services" product lets third parties like portals,
ISPs, and web-based retail services to offer online music subscriptions.
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"It's
just not interesting enough..."
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Satellite radio COULD be good for customers in "geographically
challenged" areas (San Fran, LA, "terrain-challenged"
markets). It would provide a clear signal, not unlike digital TV's
new local stations accessibility.
Another reason: a thousand truckers who drive coast to coast...
...Neither of which are good enough reasons for me. XM
does provide interesting programming -- it's just not interesting
enough for the monthly fee when figuring in a the cost of a new unit
too. Not a good enough reason for me to buy it, but a reason.
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"No
market force to push (royalty) rates down..."
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This is in response to the article "Streaming Can Produce Revenues
for Public Radio" [see coverage here].
One of the most quoted arguments made by the RIAA
about keeping the CARP rates as they are -- or even raising them --
is that broadcasters and webcasters are paying full
price (hundreds
of thousands of dollars) to get streaming in the first place, and
why shouldn't they pay artists the full amount?
However, as this article shows, as more players enter the
streaming provider field, the costs for the means of streaming are,
in fact, coming down.
Unfortunately, under the originally proposed CARP rates, there
was no hope for a reduction in costs due to volume. Even after the
rates are set by the Librarian of Congress, there will still be no
market force available to push those rates downward, because the royalty
rates will have been set by law and by an industry and union cartel
that really, despite all assurances to the contrary, doesn't want
to see Internet radio survive.
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| June 13-15, 2002 |
R&R
Convention 2002: Beverly Hills, CA |
| July 8-9, 2002 |
PLUG.IN:
Jupiter Music Forum: New York, NY |
| July 25-28, 2002 |
The
Conclave 2002 Learning Conference: Minneapolis, MN |
| Sept. 12-14, 2002 |
NAB
Radio Show 2002: Seattle, WA |
| Oct. 1-4, 2002 |
Streaming
Media East: New York, NY |
| Oct. 30-Nov. 2,
2002 |
CMJ
Music Marathon 2002: New York, NY |
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