iTunes Soon To Be Missing a Feature
How’s your iTunes doing? Plenty of music on your hard drive? I’ve got 5,550 songs, 29.22 GB. Movies? None yet, DVDs work great for me. TV Shows? A few, generally when I forget to set the VCR. Podcasts? I subscribe to eight of them, listen to them when I’m on the road. Audiobooks? None. Radio Stations? Lots, I love the selection.
I believe a massively overlooked feature of iTunes is the Radio category. There are currently 1,429 web radio stations available, in 21 categories. Most can be listened to for free. Some are the web stream of a regular over the air radio station, others are hobbyists legally sharing their love of music with the world.
Unfortunately, a March 2 decision by the Copyright Royalty Board will massvely shut down many of these online stations. Each web based radio station had to pay a certain amount of money to SoundExchange, a Washington DC based organization, to cover the performance rights to the music that is played. The old standard was a percentage of revenue, roughly 10% of revenues.
The new rate is no longer based as a percentage, but a set amount per song per listener (per play). The rate for 2007 is $0.0011 cents per play. That doesn’t sound like a lot, but it adds up very quickly. Let’s say a station had 400 listeners, for 8 hours. And you play 15 songs per hour. That multiplies out to $52.80 for the day. Multiply that by 250 work days a year, and you end up with $13,200 owed just in performance royalties. There are also costs for the streaming.
Many web radio stations had the costs well under control. But these new rates are going to kill off many of the small niche stations. My own station, Christmas Music 24/7, in 2006 had a total of $1,200 in revenues. I paid out the minimum performance royalty of $2,000. In December 2006 I ended up as the third most popular station out of the 10,000 stations at Live365.com.
Under the new performance royalty rates, I owe $11,000. Oh, didn’t I mention? The new rates are retroactive to January 1, 2006 and payment is due on July 15, 2007. So my station is now only available to paid subscribers of Live365. And probably this Christmas season will be a bit less merry for the thousands of people that listened to me last year. Now imagine what is happening with the other 1,428 stations listed in iTunes. Many of these stations may go dark on July 15th. And I’d guess that some future version of iTunes will no longer have a Radio category in the Library.
What can be done about this? Call your Representative and ask for their support of HR 2060. Call both your Senators to support S 1353, the Internet Radio Equality Act. The IREA will set the rate for performance royalties at 7.5% of revenues, the same as the rate for satellite radio. You can get tons of information on this issue at SaveNetRadio.org.
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#1 Bunyip says:This is gutting news.
I, like you, think the radio feature in iTunes is way underated. When I first began using it years ago I was living in New York. And if you know New York you know otherr than NPR its radio sucks. So I was overjoyed to find streaming music with no ads. It was perfect. Big Url on Groove Salad was my constant companion all day at work. And it was a great way to discover new music that the commercial stations wouldn’t touch with a ten foot pole.
Now, alas, it all seems to be coming to an end. I’m heading to that link you provided right now to see if I can do my part to stop this.
#2 Patrick says:I have to say that it makes sense to me that you should have to pay for performance rights. I realize that you already do pay, but the rights owners should be free to set a fee schedule that works for them, not necessarily you.
Making it retroactive is wrong - but did you have any notice that the fee change would be coming?
#3 Grace says:I find this news a bit heartbreaking. I use the radio stations cause it was versatile and also no commercials. It led me to discover new tunes out of my realm. How sad.
#4 roger hall says:So why are these cretins trying to kill Internet Radio? They’re certainly not trying to partner with them like they do with over-the air radio stations. Lack of control. No incentive. They want you to buy new music that THEY promote, not music that was released 20 years ago, or music that has no chance of selling a gazillian copies in the first month.
#5 Michael Clark says:Bunyip, thanks for your support.
Patrick, well, the rights owners can set a ridiculous high rate so they get a ton of cash from webcasters this summer, and the nothing in the future. Or they can set a reasonable rate that will insure a revenue stream until at least 2010.
Patrick, Yes, I was told that the rates would be changing. The old rates were 10% of revenue, or $2,000, whichever is greater. I took “rates changing” to mean the new rate would be something like 12 or 15 % of revenue. I had no idea that they would entirely gut the percentage of revenue method used to calculate the royalty.
#6 Yakov Chodosh says:The idea is that terrestrial and satellite radio doesn’t have to pay, so neither should net radio.
#7 Michael Clark says:Yakov, While you are correct that terrestrial radio doesn’t have to pay, satellite radio pays between 3 and 7 % of their revenues.
#8 Matt Carrell says:Sad. Sad. Sad. The kinds of stations I like to listen to have no hope to recoup such costs, and will all disappear forever. Who the hell do these slimeballs think they are? Sure, squeeze a lemon, make lemonaid. Squeeze it way too hard, it simply explodes and leaves a mess with nothing good.
#9 Richard Hather says:You’re right, the radio feature in iTunes is one of the nicest features. You can hear music from every genre at a click of a button. If you use StreamRipperX you can download the content right from the stream at a high bitrate (if its offered) and with a lot of new stations they are including track headings so your ID3 tags are right in there for you when you import them into iTunes!
#10 Loran says:Patrick, I understand your point about the “willing seller” being able to set any rates they think is fair. However, did you consider that if all “willing buyers” are shutdown by confiscatory rates set by an unelected Copyright Royalty Board just how much the current 0.0011 cents per listener/per play is going to earn the starving artists? Let me do the math for you: Zero X 0.0011 = Zero (get the point)
The webcasters are NOT the bad guys and neither are the listeners. Most independent artists, and there are tens of thousdans who will never get a contract from one of the four major recording companies that control the music industry are not the bad guys, because they realize that most AM/FM stations won’t play any “unsigned or independent artists” … Why? Because the RIAA will cut them off from receiving those promotional funds (used to be called payola). And they need those dollars to be able to compete for listeners which ultimately affects their arbitron numbers and that directly impacts their advertising revenues. Because, remember, it’s really all about the money.
The tens of thousands of small webcasters are nothing more than people sharing their favorite artists in niche genres that you probably will never hear played on any “over the air” radio station, and they’re NOT in it for money, because very few of them can find advertisers. And, if you’re hearing audio ads on your favorite webcast, those are usually inserted into their stream by their network (like Live365) which keeps every penny paid by those advertisers. Live365 stations listed on Apple iTUNES must pay all of the royalties owed to SoundExchange, Live365 pays nothing.
So, when the Live365 stations which previously paid $2,000 per year under the Small Webcasters Settlement Act of 2002, are now facing royalty bills of more than $2,000 per month retroactive to January 1, 2006, and over the next three years they will see those royalty rates increase two and one-half times over the 2005 rates per listener/per song. Yeah, most all of those stations will shutdown on July 15,2007.
Using PlanetMike’s illustration of 400 listeners only listening 8 hours let’s see what that would cost each webcaster (and right now would be a good time to remind you that NO “over the air” broadcasterpays anything). And, so as you look at the annual royalty amount, you tell me if there is anyway that any personal broadcaster can afford to pay $15,418 for what he broadcast in 2006, and another $21,199 in 2007, and yet, another $26,980 in 2008, and yet, even another $34,690 in 2009, and fianlly another 36,617 in 2010.
That’s a total of $134,904 for all five years. Now, please bear in mind most stations have listeners more than just the 8 work hours five days a week, and remember this doesn’t include one thin dime for broadband streaming costs, music acquistion, a local cable or dsl connection, the computer cost, etc. How many webcasters do you think will still be paying royalties in 2010? My guess, very few.
Do you care? Do those “unsigned” artists care that they no longer will be able to find any outlet where there music will be heard? Do the four multi-billion dollar recording companies care? The Recording Industry Association of America (RIAA) which is made up of the largest recording companies and their “signed” artists intends to shutdown any independeent webcasters and ultimately the indeependent artists that they playing. Why? Just a business decition to eliminate the Competition. It’s all about the money and absolute control of the industry, supported by huge poltical contributions to write the copyright laws to carry out their plan. Your comments will aid and abed the RIAA’s fight.
Your sense of fairness ought to take into account the unintended consequesnces. But, like John Simson (the SoundExchange CEO) who argues that if these rates will cost three times more than the most successful webcasters can earn, “just run three times the number of advertisements.” Does he think that it’s that simple, of course he does, his name is Simpleton, I mean Simson.
#11 Rob says:Thanks Richard, for giving SoundExchange another excuse for charging internet radio broadcasters these exorbitant rates.
But hey, you’re getting your “free” music today, so what does it matter?
#12 ThunkDifferent.com says:This has got to be repealed.
i read recently at http://www.savenetradio.org/ that this is hitting the Senate floor. Please vote for web radio rights now.
Sign-up and spread the word.
http://ThinkDifferent.com
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