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CRB satellite radio decision sets up potential "win-win" for webcasters and labels

Posted on: 12/06/2007

If the parties involved can get their acts together in a timely maner, Tuesday’s CRB decision re: satellite radio royalty rates could be the perfect set-up for a “win-win” between webcasters and the music industry.

SoundExchange’s opportunity

Here’s the way I see it: SoundExchange has an opportunity to say, “For the first time, we now have a decision from the CRB judges about what our music is worth expressed as a percentage of revenues — objectively 13%, but discounted down to 6% to 8% for the next few years so as to not be disruptive to the new industry of satellite radio.”

They could footnote an observation that they believe even 13% is low and that they reserve the right to make that point in future Copyright Royalty Board hearings.

But, for now, they could continue, “We’ll acknowledge that Internet radio is trying to be as supportive to musicians and music sales as satellite radio is, so we’ll graciously offer that same rate to webcasters for the same period.”

Webcaster’s potential response

Webcasters could respond as follows: “While we believe that free radio airplay of recorded music has, over the past few decades, helped build America’s music industry into the largest and most profitable in the world, we acknowledge that Congress did pass a law adding this royalty for digitally-delivered radio and granted decision-making authority to the Copyright Royalty Board.

Given the fact that the CRB’s decision for Internet radio would bankrupt virtually all of us, we appreciate SoundExchange’s offer to grant us the satellite rates and we graciously accept.

We look forward to helping the music industry break new artists and sell music — both catalog and new releases — through 2012 and beyond!”

Opportunity for PR win

This might even be a rare public relations win for the beleaguered music industry…

More importantly for the music industry, this would free SoundExchange to focus on their Congressional lobbying efforts to get a sound recordings performance royalty from AM/FM radio, which is a much higher-potential-value initiative for them than trying to squeeze pennies on the dollar (by comparison) (actually, more like mils on the dollar) from webcasters.

Oh, I almost forgot: Consumers would benefit too. That makes it a win-win-win!

And, actually, the fact that both sides can quit bothering Congressmen on this relatively-minor issue (relatively minor compared to Iraq, education, health care, etc.) could make this it a win-to-the-4th-power!

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  1. To: Sound Exchange

    As a consumer of Internet radio (and a person with a background in radio who plans on starting a non-commercial Internet radio station soon)I am encouraged by the CRB’s latest action and hope you see this as a model of a good solution for emerging new media in general.

    You will benefit from making this a standard rate for BOTH satellite AND Internet radio services.

    While I can’t speak for them, as a betting man I would lay 10 to 1 odds that if you go along with this solution for both Satellite and Internet radio and accept any reasonable rate the CRB may propose in the near future of over-the-air commercial and non-commercial broadcast services, you will get the NAB off your back and Congress may well decide to backburner the Internet Radio Equality act as long as the performance rates remain reasonable.

    David R. Katz · Dec 7, 06:26 AM · #

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