Ocelopotamus

July 15 is “the day the music dies” — the date that Internet radio will be essentially destroyed by new draconic royalty fees approved by the Copyright Royalties Board if Congress doesn’t take action to fix the situation.

The exorbitant new rates force stations to pay a fixed fee for every song they play, regardless of whether they’re making any profit. And even worse:

Because the current rates are retroactive to January 2006, an estimated 90 percent of Internet stations will go bankrupt as soon as the rates go into effect.

… Small Webcasters aren’t alone. Large streaming sites like Pandora, AOL Radio, Yahoo and Live365 are also facing a grim future.

Tim Westergren, Pandora’s founder, explains it like this. “This fee is so outrageously high that most Webcasters will have to shut down immediately,” he said. “We feel this is a power play by the big (record) labels who are trying to control an industry that is undergoing a fundamental shift; a shift from what was an industry controlled by a few powerful companies with a lot of money, to one controlled by fans and musicians. The labels are just trying to delay their own obsolescence.

For more background, Miles Raymer had a great column about this in the Reader back in May.

By the way, just in case you think this is all about being fair to musicians and making sure they get their cut, here’s the most outrageous part of it all: the industry will be collecting money supposedly on behalf of musicians and bands they don’t actually represent, who will likely never see the money.

From Miles Raymer’s Reader column:

Though the RIAA only represents the Big Four, SoundExchange collects royalties on behalf of all copyright holders whether they claim them or not — which means it can take action even against webcasters who traffic exclusively in content from indie labels that would prefer to let things slide. To prevent such action a webcaster would have to negotiate exceptions with each label individually.

That’s right. To put this in simple English: If your friend’s band records a demo and your friend hands it to you with express permission to play it on your Internet radio station, SoundExchange will still demand a huge royalty payment on behalf of your friend’s band, even though your friend has never signed any kind of agreement with SoundExchange and will never see a cent of that money.

Tell me how that’s not corporate gangsterism? In fact, there’s a historical phrase for this: “Taxation Without Representation.” And if you ask me, some serious tea needs to start hitting the harbor.

Fortunately, there’s an action step (again from the Raymer column):

What might stop it is the Internet Radio Equality Act, H.R. 2060, introduced April 26 by Washington Democrat Jay Inslee and Illinois Republican Donald Manzullo. The law would nullify the CRB’s ruling and put webcasting on the same footing as satellite radio — that is, with a royalty rate of .33 cents per listener-hour or 7.5 percent of total revenue, chosen by the provider. (According to estimates by tech site BetaNews, AOL would owe $916,000 for 2006 under H.R. 2060, as opposed to $23.7 million under the CRB’s scheme.) July 15 may seem a ways off — until this Tuesday the deadline was May 15 — but Maloney and McSwain urge everyone to call their representatives in Congress now.

So if you haven’t already done so, call your elected officials and ask them to support H.R. 2060 and sane royalty rates for Internet radio.

An article from earlier this month says that:

RealNetworks Chairman/CEO Rob Glaser, Yahoo founder Jerry Yang, Live365 Chairman/CEO Mark Lam and Pandora President/CEO Joe Kennedy have sent a letter to every member of Congress asking them to take another look at the increased webcast royalty rates set by the Copyright Royalty Board in March.

Meanwhile, the SaveNetRadio Coalition has declared a National Day of Silence for Tuesday, June 26, in order to help raise awareness about the campaign:

To protest these rates and encourage the millions of net radio listeners to take action and contact their Congressional representatives, a national Day of Silence will be held June 26. Webcasters across the country will observe this day of silence in a number of ways, including dedicating entire programs to the campaign to save Internet Radio and broadcasting complete silence. For an updated list of the participants in this national day of silence, visit http://www.kurthanson.com/dos/. Webcasters who would like to participate in the day of silence, place contact the SaveNetRadio coalition at dayofsilence@savenetradio.org. Net radio listeners, please excuse the interruption of your normal programming and take action to ensure this silence is not permanent. Call your Congressional Representatives today.

Action links:

• Keep up to date with the campaign at the the SaveNetRadio.org site.
• Here’s their handy “contact your elected officials” page.

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UPDATE: As Malcolm notes in the comments, there’s been a breakthrough.