Wednesday, February 14, 2007

Indie Radio Threatened Again

Many years ago, I began a "career" in community broadcasting, at WCSB 89.3-FM in Cleveland. From 1987-2002, I butchered many formats, from rock 'n' roll radio to political talk. I was always very grateful for the opportunity, and always very grateful for the small but dedicated audiences that were looking for and finding something different on WCSB.

Stations like WCSB have adopted a fine mission: To air worthy materials the corporate stations won't touch. WCSB has for years aired foreign language shows, blues, jazz, hardcore punk, 20th Century classical, etc. WCSB has aired a slew of political shows from under-represented viewpoints, such as Radio Moscow back in the day, feminist viewpoints, and even my old Libertarian news and comment show. A niche market exists for it all.

At the same time, independent community stations are doing what the big corporate stations are doing- broadcasting online. In fact, the community stations led the way. WCSB was the first Ohio station to simulcast online. Being online allowed unique stations like WCSB, WFMU, WRUW, among many others, to reach a wider audience than their paltry signals might. People who moved out of town and wanted to hear their old favorite, or just people interested in interesting, eclectic radio all could hear from anywhere.

The thing that could end this is the royalty situation. Like other community stations, WCSB pays royalties to outfits like BMI and ASCAP, who distribute money to artists based on airplay. Royalties for online spins have long been a grey area.

No longer, and not for the better. Here's the word from my long-time radio buddy Keith Newman:

WCSB 89.3 FM in Cleveland and other college radio stations across the country may have to give up webcasting their signals due to new rules set up by Sound Exchange and the US Copyright Office. The rules were created to ensure that artists would be paid for their work that was webcast online. It sounds like a noble cause. Paying musicians for the music they make sounds wonderful to me and I’m all for it. WCSB pays royalties to BMI every year for broadcast materials which I don’t have any problem with. Unfortunately the rules from Sound Exchange will guarantee that all but a few bands never receive a dime from getting played and fewer people will know they exist.


The fees for reporting are expensive and more importantly the reporting requirements are prohibitive. The costs are .02 per listener per song and there are 11 data fields that must be tracked for each song played. Bands receive .0007 cents per song played and Sound Exchange will not send out checks until a band accrues at least $10.00 in songs played. A band would have to be played more then 14,285 times before they would receive their first check! And to rub a little more salt in that wound it costs $45 to register a sound recording with the US Copyright office.

Almost all of the money paid in to the system by college radio stations will never reach the artists that these rules are supposed to benefit. It is much more beneficial for college radio to be able to introduce new music to audiences all over the world via webcasts. Most bands played on WCSB would make more money by selling one cd then they will ever see from sound exchange fees.

The new rules will force college stations to either adopt a mainstream radio format (it's a lot easier to report songs when you play the same thing every hour) or in many cases cease webcasting. A few stations might try to comply with the new reporting rules but when you look at the reality of what goes on at college stations it would be difficult. A college radio DJ has to pull their music and cue it up. They need to choose their Station IDs and PSAs and cue up more music. They need to monitor what they play for decency standards or else face the prospect of being fined $325,000.00 by the FCC and cue up even more music. They need to answer phones and pull requests and did my Dead Kennedy’s CD just end?? Oh my god dead air!!! Throw anything on! When is a DJ that does a rock show supposed to enter the 11 data fields required by Sound Exchange? Most rock songs only last 2-3 minutes. It can’t be done during commercial breaks because there aren’t any. College DJ’s would need to get secretaries just to handle the paperwork.

The new rules are not about paying artists. They are about controlling content and limiting competition. The RIAA (Recording Industry Association of America) has been hemorrhaging money for years and is trying to make it all back by controlling the information you can access over the web. As bad as this is for college radio it is far worse for the bands that will never be heard by an audience that wants to hear
them.

So enough bitching... I do appreciate if any of you are still reading this. Here's what you can do about it.

1. Go to www.wcsb.org and read the SAVE OUR WEBSTREAM message. If you already feel you've read enough you can skip reading it and go to step 2.

2. Click on the text of the SAVE OUR WEBSTREAM message. This will take you to a page with a form letter that you can send to your elected representatives. If you don't know who your representatives are we have links to help you out. Keep in mind that you don’t need to be 18 years old to write your representatives!

3. Pat yourself on the back for helping to support college radio and making the Internet a better place.

For more information on this issue you can read Michael Gill's "A threat to Your Stream" article from the Cleveland Free Times. Http://www.freetimes.com/story/4757. Some of the details listed here came directly from his article. Others came out of my own research in to the matter including information from http://www.soundexchange.com/

Feel free to post or send this to anyone you think might be interested in radio, fair competition and free speech.

Thanks for your time and your activism,

Keith Newman
Scruggscorp Syndicated Radio
& Crap!
Mondays Midnight-2:00 AM EST
WCSB 89.3 FM, Cleveland
http://www.wcsb.org/


I want to see bands get paid, but I don't want to see the station choked into oblivion. This all reminds me, the erstwhile third party candidate, of the onerous reporting rules caused by the two major parties in their badly misnamed 'campaign finance reform'. It has the effect of keeping good people out of the race. This all looks like it could knock good stations off the net.

Who benefits from that? Draw your conclusions, but I'll say it isn't the artists.

6 comments:

Kevin said...

Mike since you have been in radio please explain to me why artists get paid at all when a radio station plays their music. It seems to me a radio station that plays a bands record should be looked at as advertising for that band? Radio station airplay definitely contributes to sells of records. Please don't take this as argumentative, I've just always wondered this

Mike Kole said...

Kevin, I can't say what the rationale is for non-profit commercial stations. I can say that the rationale for royalties on commercial stations is that the music is the basis for drawing an audience. The audience is the basis for selling the ads. No music = no audience = no ad sales = no profit. So, the artist gets pennies and nickels per play, as as a cut, it seems perfectly fair to me.

Now, as regards non-profit, commercial-free stations?

Anonymous said...

If non-profit stations were allowed exemption from royalties on music it might follow that churches would be allowed to show the super bowl.

Wainstead said...

Kevin:

The logic goes something like this: the recordings of the artists are property of the record companies. To play them on the radio is to let people hear the music "for free." Well, that simply cannot be allowed! Record companies must collect money on that airplay! It amounts to a "performance" of some kind.

When I had History of Communications in college (I went to the same university as Kole), we were taught there was the "Era of Jeannie With the Light Brown Hair." This happened when the record companies concocted this notion of radio stations paying them royalties; the stations refused; the companies said "You can't play our records then"; the stations all started playing old royalty free music, and "Jeannie" became a hit all over again. (Thus the era's name).

Eventually the radio stations caved in and a royalty plan was agreed to... the truth is the artists don't see a whole lot of this money. Most major label recording contracts, in the words of my old boss at Scat Records, "are designed to deprive the artist of the money due to him." (or her).

For college radio, there is a special plan whereby they pay ASCAP and BMI (and what's the other one? Seashell or something) a lump sum once a year based on a sample of what the station played in a three day period. This is due to college stations having little money to begin with.

In commercial radio, it's been long known that -- while payola is illegal, i.e. labels paying the stations to play certain records -- there are middlemen "promoters" who take money from the labels and pay the stations to play new records. So you have this big circle of cash where label pays promoter, promoter pays station (or DJ, or program director, or all three, plus some coke and a hooker), station plays record, record becomes hit, and station pays ASCAP/BMI royalties.

Webcasting... heh... I remember when I was General Manager of WCSB; I was setting up our online broadcast (we were actually third in Ohio to broadcast online, behind WKSU, who have gobs of money to spend on things like that, and WMJI, who were in cahoots with the audio hardware company same as we were); and I called BMI and explained to them what I was going to do ("Huh? Stream audio over what? No, we don't charge for that.") I've always been of the school of "ask for forgiveness instead of begging for permission" anyway, so we went online.

Then webcasting started to scare the crap out of the major labels: why, people could COPY THE AUDIO STREAM TO THEIR COMPUTERS. Well, whoopee, they can tape radio to their 8 track machines too. But the labels decided this required royalties too, and at the outset they came up with rates so high as to drive nearly everybody out of business. This is all well documented elsewhere though.

So in a big longwinded roundabout way there's your answer. I think. :o)

Andrew Kaduk said...

ASCAP and BMI are by far the biggest ones, and if you pay them, you're pretty well good to go for about 90%+ of the music that has ever been written. Were you all aware that these entities must be paid to even operate a juke box?

Here's something kinda cool that really grinds the RIAA's ass though:

I am in a band. We are the house band for a club very close to Fort Wayne. The club pays ASCAP and BMI to cover their juke box and whatever cover music is played by the bands hosted there. I have been told by the bar's attorney that since I am a de facto employee of the club, I have carte blanche to download whatever music I want from whatever sources I want, as long as I feel that I can reasonably argue in court that my downloads were for the purpose of learning and reproducing music at the club.

How sweeet is that?

Heh.

Timothy Maguire said...

As a Music Business graduate, I should probably jump in here. The performance royalties paid by radio stations typically go to ASCAP, BMI, and SESAC, otherwise known as performance rights organizations (PRO’s). These PRO’s are not bad things, even from a libertarian perspective. Granted, they're big companies, and they make mistakes, but they are ultimately working for the songwriters, not the record companies. Let me explain.

When you hear a song on the radio, the station pays a fee to one of the PRO’s. This fee goes to the SONGWRITER, not the artist (unless they happen to be the same person). The songwriter wrote the song, they own it, and no one else can use it without permission, as that song is actual property protected by US copyright law. The station has to pay to use the songwriter's property, whether the station is non-profit or not.

It doesn't matter that the artist is getting free publicity. That doesn't help the songwriter, who many times is a different person. These performance royalties are usually the main source of a songwriter’s income. I don't think libertarians would let ANYONE use someone else's property without fair compensation.

The record companies don’t actually get any money at all from performance royalties paid by radio stations. The money paid to ASCAP or BMI (non-profits), or sometimes to SESAC (for-profit), is then funneled to the songwriter. The songwriter then typically splits the royalties 50/50 with the music publisher, not the record company. If it weren't for these performance rights organizations, songwriters would have to try to track down each and every radio station (and nightclub, tv station, bar, concert hall) that might be playing his/her song. For more info, check out http://en.wikipedia.org/wiki/ASCAP.

Now, as far as Mike's original post, about these new royalties for web performances, this does sound a little extreme, and I have to admit I haven't heard anything about it. We should all keep an eye on it...Many thanks go to Mike for getting the word out!