Tuesday, August 19, 2008

Radio Royalties on Repeat Mode

The RIAA Logo.Image via Wikipedia The latest (yet not new) story on Pandora claiming they will pull the plug if there isn't relief on the proposed new streaming radio royalty rates has people talking again. The discussions and debates on these potentially crippling rates (see previous posts and savenetradio.com) are heating up again thanks to the Pandora story (and the recent RIAA-backed shutdown of Muxtape).

I agree that it is a very complex issue - with many parties to be considered. Webcasters, songwriters, artists, record labels, technologists, legislators, consumers. There are some that think that the music "establishment" (aka major labels, RIAA, SoundExchange) are doing everything in their power to reverse the clock so they can go back into history and undo some of their previous actions. The hope is, that in doing so, they create a better future for recorded music sales - one in which they own and control every piece of the pie. Others go so far to say that the labels actually have a vested interest in *killing* streaming radio as they see it as actually a replacement to sales. By killing the existing ecosystem, they can start over (an idea I don't totally disagree with). It's like those movies where some madman wants to nuke the planet so we can "start anew" and cleanse the sins of humanity's past.

I don't really know where I am going with this... other than, this is how I see the most recent actions of the "establishment". I may be somewhat naive, this is how this whole thing seems to be playing out:

Act 1
  • labels give terrestrial radio the rights to broadcast royalty-free (to generate awareness and sales of physical product)

Act 2
  • labels want more promotion so they start *paying* to get the content played (payola)

Act 3
  • labels told that "pay for play" is illegal and start looking for additional (free to them) promotional outlets

Act 4
  • labels want more promotion so they give MTV rights to royalty-free broadcast of music videos

Act 5
  • labels see other parts of the music ecosystem starting to make money (or *not* make money, but attracting users) and think "hey, that should be ours too"

Act 6
  • labels start demanding/increasing payment on plays (where they used to gladly pay for such a thing and would still be doing so if the federal government deemed it illegal)

Act 7
  • streaming/radio ecosystem can't afford to be in the radio business and all exit - or move to royalty free programming (talk, news, etc.) - this is in addition to MTV/VH1's continued shift to reality TV and away from music

Act 8
  • labels don't have any promotional outlets to get their content heard

Act 9
  • labels continue to explore new media distribution outlets for their content (commercials, soundtracks, etc)

Act 10
  • due to limited inventory and increased competition to get song "placement" labels offer royalty-free content

Act 11
  • go to Act 1

“The definition of insanity is doing the same thing over and over again and expecting different results” - Albert Einstein


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1 comment:

otis80hobson said...

Loved the Einstein quote. Is there an inbox at RIAA where we can all send this kind of thing? BAH!!!