 Veteran entertainment lawyer calls Simson out on his math ·May 14, 08:56 AM
"For 2006 they [the big webcasters] want you to give back  $12 million when all they would owe under
the new CRB rates is $850,000."This implies: For 2006, big webcasters would have owed $12,850,000. Under the new H.R. 2060/IREA rates (.33 cents / hour), SX says big webcasters would owe SX only $850,000: $850,000 / .0033 = 257,575,758 aggregate tuning hours for the major webcasters for 2006. But 257,575,758 at the old (2005) ATH rate (which big webcasters paid so far in 2006) was: 257,575,758 (ATH) * 0.0117 (ATH rate) = $3,013,636 So by this math, the major radio services seem to have paid $3 million in 2006, not $12 million SoundExchange is saying they paid (if the $850,000 number is true). Also, based on the current 2006 rates, assuming an average of X songs per hour, here’s the 2006 fees you get: $2,472,727.27 (at 12 songs per hour) $3,090,909.09 (at 15 songs per hour) So there is no way by this math that webcasters paid $12 million — unless they’re figuring the $500 per channel minimum for the other missing $9 million bucks, or 18,000 distinct channels. (Maybe that extra $9 million comes from Pandora?) Here’s feedback from SomaFM’s Rusty Hodge on John Simson’s math… However, these ATH numbers do not seem accurate for the full year, in the January ’07 Arbitron Net Radio Ratings release [here], they showed average  concurrent listeners from 6a-Midnight:Yahoo Launchcast: 164,800 AOL Radio Network: 159,400 Clear Channel Online Music and Radio: 82,000 Live365: 67,900 Total: 474,100 average concurrent listeners, which if calculated in aggregate tuning hours, would be about 347,041,200 PER MONTH (albeit that number is surely a little high, because usually Midnight-6am AQH is lower than 6am-Midnight AQH). Extrapolating, that means the major services in 2006 had on the order of 3.5-4 billion tuning hours in 2006. Based on the 2005 rate which big webcasters paid already for 2006, and assuming only 3 billion total listening hours, that would be $35,100,000 in royalties they paid in 2006. Under the CRB decision, that would go up to $36,900,000 for 2006, and the new proposed IREA/H.R. 2060 rate of .0033/listener hour would bring that down to $9,900,000… or lessen the 2006 amounts paid from $35 million to about $10 million. Which still doesn’t match the $12 million they’re talking about! UNLESS, Arbitron’s numbers include non-music programming, and that makes up a majority of what AOL/Yahoo play; OR, more likely, the big webcasters have direct-licensed much of their content at reduced rates (possibly outside of SoundExchange), and only pay SX for performances of tracks they don’t have direct licenses with. Still, the numbers don’t make sense. Given all that, where did the SX numbers come from? They’re obviously not deliberately misrepresenting, so there must be some theoretical basis for them. Am I missing something here? Shouldn’t they say, this new bill will reduce their rates from $3 million to $850,000; or from $35 million to $10 million? The new ATH rates are 28% of what the old rate was. SoundExchange is inciting the labels and artists against webcasters using numbers that don’t seem to make sense, and don’t back up their figures with data.By villianizing large webcasters at the expense of small webcasters, the only thing that will happen is the small webcasters will get screwed.
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From
P2PNet: "Do you remember taking math tests? Specifically,
do you remember the warning you always got before you started?
executive director, has started throwing around some remarkable
numbers [see SoundExchange press release 
