The Great Change: Turning Cathy into a Lawyer

Long-time readers here have heard me rave about singer-songwriter Paul Thorn before. While his career continues to develop along an increasingly mainstream trajectory, the name of his homegrown label, "Perpetual Obscurity," pretty well describes his historical level of fame. Still, he's a fantastic, talented, entertaining artist and his music is not to be missed.

But his music, and the music of other "undiscovered" musicians may well be missed if the proposed royalty rates for web radio stations are allowed to stand. Several years ago Congress passed a law that mandated Internet-based radio stations pay a statutory royalty to both the performers of the song and the songwriter. If that might seem reasonable, bear in mind that over-the-air radio stations do not have to pay both royalties. Through collecting societies like ASCAP and BMI they pay the songwriters, but they do not have to pay the performers. In fact, record companies typically give radio stations the records they'd like to play. That's the way business has been done for years, and record companies have done just fine with that system, using the radio exposure to promote regular sales.

But when Internet radio came along, the recording industry took its now typical stance of seeing a possible revenue stream it thought it was entitled to help itself to, and so it enlisted Congress to help it do it. From this excellent LinuxJournal article you should read for more of the historical details and current implications:

When the DMCA [CG: Digital Millennium Copyright Act, one of the laws that addressed this subject] became law in 1998, [...] it left fees and accounting requirements open to resolution through something called the Copyright Arbitration Royal Panel, or CARP. When the Library of Congress (LOC) finished the CARP process in mid-2002, the imposed fee structure was so steep, and the reporting requirements so labyrinthine, that many Internet radio stations were quickly silenced. Only a last-minute intervention by Congress, led by retiring North Carolina senator Jesse Helms, saved the industry from being killed entirely. That compromise spared small operators by charging them 10% to 12% of their revenues, rather than by song and listener count. This still killed the open streams of many larger operators (including those of KPIG, the first commercial station on the Web), but it did allow others to live. In other words, the RIAA managed to cripple but not quite kill the Internet radio baby in its cradle. That job was left up to the Copyright Royalty Board, a three-judge panel created by Congress in 2004 and working under the Library of Congress.

The problem today is that CARP has just proposed new rates that are astronomic and unaffordable. Instead of revenue percentages, the new fee structure is per-song, per-listener, regardless of whether the listener is even paying the web radio station anything. (Many don't.) Small stations are now looking at owing not 10-12% of their revenues, but potentially 125%!!! Even large web broadcasters like AOL may be looking at $20 million in fees, which could drive them from the web as well.

But without the small outlets, many independent musicians will never have a chance to be discovered. As it's been said, the true threat to an artist is not piracy, but obscurity. All the platitudes about making sure artists get paid are completely hollow if the money grab today closes them off from paying customers tomorrow, which is what will happen if the rate structure is allowed to cripple this important vehicle many artists depend on for reaching wider audiences.

Around the Internet I've been reading more and more people talking about this horrible situation. But what made it strike closest to home, I think, was when I got an email from one of Paul Thorn's bandmates:

We received this plea from our good friends at All Memphis Music Radio. They, and Internet radio in general, have been very good to independent artists like PT and we thought you might be interested in showing your support...

The email went on to include a sample message that could be sent to people's Congressional representatives, asking Congress to step in and stop this rate structure from taking effect and killing web radio. Many other affected parties are also pursuing other channels, including the limited appellate avenues available under the CARP process and lawsuits to challenge the system both substantively and on due process grounds. It's anyone's guess right now how the litigation will turn out, but if ithe issue becomes politically charged enough hopefully Congress will be inspired to step in and remedy its previous legislation, which has led to the problem faced today.

Meanwhile, I'm continuing to discover lots of other non-mainstream musicians. I went to a Bonnie Hayes performance the other night, where she was joined by Vicki Randall, who has a new CD, and Deborah Holland, who does as well. I particularly enjoyed Deborah's songs, including her lament about the homogenizing of America in "Chain Stores, Malls, and Restaurants," her interpretive monologue of her son's protests on having to practice the violin (though I think I'm siding with her kid on that one...), and her anthemic song with the chorus, "I was a bad girl once, but I'm a soccer mom now." Pick up her Bad Girl Once CD, or tune her in on an Internet radio station while you still can...