July 15 - Big copywrite changes - Huge Royalties

[OpenMike]

New rates signal day Web-radio music dies

By Kenneth Rainey, a member of Tangleweed, an acoustic Americana band from Chicago
Published July 9, 2007


Every band dreams of the lucky night it'll be discovered by a music promoter or favorite record label. Overnight you've got a hot record, radio stations everywhere playing your songs and your band becomes a household name. It's the classic musician's fairy tale.

But it is a fairy tale and, for every new artist who is discovered by a major record label, there are thousands who aren't. For the rest of us, pursuing a career in music is hard. Now, proposed new royalty rates for Internet radio threaten to make it harder.

You see, our Americana band Tangleweed was "discovered" -- just not in a nightclub by an industry executive. We were discovered on Pandora.com by bookers for a huge music festival. After two years of playing small clubs in Chicago, our invitation to the Wakarusa Music & Camping Festival in Lawrence, Kan., was a big break for us.

While listening to similar music on a custom Internet radio station on Pandora.com, a festival organizer heard a Tangleweed track. He liked it so much that he tracked us down and offered us the chance to perform at the festival. With more than 7 million Internet radio listeners every day, Internet radio offers exposure for groups like ours that just isn't possible on mainstream radio stations.

But now we're at risk of losing it.

The Copyright Royalty Board recently issued catastrophic royalty rate hikes -- increases from 300 to 1,200 percent -- which are set to take effect July 15. And some of the increases will be retroactive to January of last year.

While music artists certainly benefit from royalties, this kind of royalty rate hike will mean bankruptcy for almost every Webcaster. Music is a labor of love for many Webcasters, as it is for so many musicians. A significant number of small Internet radio stations already operate at a loss; they carry on because of their commitment to the music they play. A dramatic rate hike is more than most can bear.

Right now, independent artists make up less than 10 percent of what's played on broadcast radio, but on Internet radio, we make up about 37 percent.