Is it truly so bizarrely Dr. Strangelovian, as you say in your opening paragraph, to think that artists might embrace webcasting "because of all the wonderful promotional value it brings to their careers and how it helps to sell their records"?
- Canasta is a local indie "chamber pop" band in Chicago that plays three or four club gigs a month and has self-released one CD. We're playing them on AccuRadio's indie rock channel, mixed in between The Shins and Modest Mouse, and they're pretty happy with that! They're getting exposure to a national audience and making CD sales via the link we provide on our player. Our Chicago-area listeners who have noticed and learned to like their music are far more included to go see Canasta perform live than they would otherwise be.
- The same is true of Chicago-based cabaret artist Justin Hayford. He's recorded three terrific albums of obscure pop standards (OK, they're obscure, so they're not really standards) on the indie label LML Records and supports them with occasional cabaret (and piano bar and restaurant) gigs. Do you think Justin doesn't like having his CDs played to hundreds of thousands of listeners every quarter, mixed in among Frank Sinatra and Blossom Dearie tunes, with Amazon links prominently displayed on our media player while the song is playing? Of course he likes it!
- Finally, trying to head you off at the pass, let's talk about Frank Sinatra: Perhaps the finest singer America has ever produced, Sinatra has gotten virtually no airplay on American AM or FM radio stations since he and Nancy had a pop hit with "Somethin' Stupid" back in the '60s. Do you conceivably imagine that his Capitol and Reprise CDs sell more copies because he gets no FM airplay than they would if there were a major FM station in every U.S. city that featured pop standards and he did get airplay? We're playing his entire modern catalog on AccuRadio's "Swingin' Pop Standards" channel, listeners love it, and I will bet you dollars to doughnuts that those listeners are buying more Frank Sinatra CDs now than they were before they discovered our channel. (For some informal market research to support this point, click here.)
But let's take a look at the rest of that intro paragraphthe display of "all these images of former recording artists all over the world working at McDonalds."
Exactly which class(es) of artists do you have in mind?
If you're thinking of the artists who never had a hit record, one big reason is no doubt that they didn't get radio airplay in the first place, and a sound-recordings performance royalty isn't going to help them because they're not getting any airplay nowadays anyway.
If you're thinking of one-hit-wonders like The Oneders (pronounced "oh-NEE-ders"), I don't see why you presume that having one hit record should guarantee people a life of carefree luxury forever after, which is what you're implying; and in any event, even the most optimistic financial projections for royalty payments that could be received by the member of a one-hit-wonder band is, I believe, perhaps tens of dollars a year at best. You can do the math: Take any size pot of royalty money you like; subtract out SoundExchange administrative fees; split the balance 50% to the artists; split that by the hundreds of thousands of songs that get to divvy that pool of money up (with the bigger portions going to this year's power-rotation hits); then split that among the band members. It's no three-bedroom house in the suburbs, that's for sure.
If you're thinking of a mid-level artist like, say, Mary Wilson of the Supremes (who spoke out on behalf of SoundExchange last month), you know, Jay, she's not working at McDonald's, she's out performing club dates or something. Certainly, though, she's in the class one would be most sympathetic to. But...
If you're talking about Celine Dion or Rod Stewart, which I know you're not, well, here's the problemto get Mary Wilson $100, you probably have to get Celine or Rod thousands upon thousands of dollars. And the only way to do that, in 2007, is to set a rate so high that it bankruptsand thus shuts downthe webcasting industry.
And then you get nothing at all, and the public loses a medium it is in the process of embracing, and everyone loses.
In any event, Jay, I too have reached an incontrovertible conclusion. Record labels and musicians are without a doubt getting a free ride if they do not have to pay for the promotional exposure that radio stations give them. Record labels not only receive great value from this billions of dollars' worth of marketing power, they have actually created an industry using this marketing support.
Of course, as you may have noticed, what I've done here is taken your sixth paragraph above and flipped it on you. I'm just kidding. But, to use Al Franken's term, I'm "kidding on the square." That means I'm not really kidding.
We talked yesterday about the "long tail." If we both accept the premise that one of the influences of the Internet has been to reveal the true "long tail" of consumer preferences, and record labels are going to try to take advantage of that to make money, what would be most helpful?
Probably free promotion for all of your "long tail" genrese.g., for your Celtic artists and your Broadway original cast albums and your electronica sublabel and your classic jazz catalog. Well, you're obviously not going to get that from terrestrial radio, and Starbucks only has room for about four CDs on the counter, so what you might like most if some kind of serviceI don't know what you'd call itpromoted those genres with three- to four-minute free (to you) commercials, complete with picture of the cover art of the CD being promoted, plus a link that would enable consumers to buy the CD being promoted at that moment. That would be sweet! That would really enable you to build the "long tail" aspects of your businesses quickly and affordably.
Hey, I know what you'd call itInternet radio!
There's a saying I love but I don't know who to attribute it to: "The role of technology is to provide opportunities for the entertainment industry, and the role of the entertainment industry is to seek injunctive relief from those opportunities."
That's exactly what's going on.
That "seek injunctive relief" quote is so funny and dead-on that I should probably stop right there... But me address one more point.
Music and radio have operated on what seems to be a pretty fair quid-pro-quo basis for years. Both sides of the business have built massive shareholder value with the help of the other side: Radio stations became popular and profitable playing great recorded music, and record labels became large and profitable thanks to the trillions of hours of free promotion that radio gives their releases.
But what you're saying in your piece today, Jay, is "Yeah, we help each other. But I want more."
I guess it's understandable. To paraphrase a classic line from David Mamet's film, Heist, ''Everybody wants money! That's why they call it money!''
But when you say, "It is the webcasters who have to stop worrying, and just accept the proper and righteous duty that the music they use must be paid for," you're leaving out the issue of "how much."
You're leaving out the fact that your organization went to the Copyright Royalty Board and asked for (and was granted) a rate that equates to far more than 100% of every webcaster's total profitsand in fact (I continually find this astounding) more than 100% of most webcasters' total revenues.
(The hypocrisy of the labels' behavior is beginning to drive me crazy. Your guys used the precedent of other countries' laws as your rationale for establishing a sound recordings performance royalty. OK, fine. But then when it comes time for proposing a rate to the CRB, you ask for 20 times the rate paid in those other counties, completely ignoring precedent! Arrrrghhh!)
It's tough to be sanguine about terms like that.
Kurt Hanson is Publisher of RAIN: Radio And Internet Newsletter, the leading trade publication for the field of Internet radio, and CEO of AccuRadio.com, a popular multichannel Internet radio property that reaches almost half a million unique listeners per month. He previously worked at WLS/Chicago and WLUP/Chicago.