Dissecting the SoundExchange Propaganda

By | April 29, 2007 at 7:54 PM

SoundExchange has released a series of false statements to destroy the credibility of SaveNetRadio Coalition and the Internet Radio Equality Act. ThereIsNoRadio is a small webcaster that will be permanently silenced if this bill does not become law.

A new bill has been proposed this week called the “Internet Radio Equality Act” (HR2060). This bill would allow webcasters to pay rates similar (7.5% revenue) to what satellite radio pays now, but a much lower rate than the Copyright Royalty Board recommended on March 2, 2007 for internet radio.

SoundExchange’s press release in reaction to this bill proposal is riddled with propaganda and false statements. Their headlines scream “Internet Radio Bill Would Strip Artist Payments” and “Musicians Would Pay Mega-Corporations”. It states that “This legislation, if passed, would come at the expense of hard-working artists, who, on average, received just $360 each in royalties from webcasting in 2006.”This bill would put at risk the very artists that webcasters purport to care about,” said Simson.”

If SoundExchange truly cares about the artists, then one would have to ask why they take 50% of the royalty payment immediately. After SoundExchange gets half, the remaining 50% is divided as 45% between the record label, the featured artist, and the remaining 5% going to the session musicians on the recording. It certainly appears that SoundExchange is getting a higher percentage of the royalties from the artists work than the artist. SoundExchange also has the right to keep any royalty payments that are unclaimed after three years. The artists are not only responsible for requesting their payments, in several instances they have had to take legal action to force SoundExchange to pay them. Many artists claim to have never received a royalty payment from SoundExchange. Who did you say was exploiting the work of these artists again Mr. Simson?

John Simson said, “The idea that this bill would help small webcasters or artists is ludicrous since less than 2 percent of all royalty payments in 2006 came from small webcasters.” In March, John Simson also said to the Washington Post, “Is 10,000 stations the right number?” “Does having so many Web stations disperse the market so much that it hurts the artist? What’s the right number of stations? Is it 5,000? Is it less? Are artists better off having hundreds of listeners on lots of little stations, or thousands of listeners on larger stations?” Simson pretends to care about the small webcaster, but these statements prove that SoundExchange has no issues at all with driving the small webcaster out of business. Simson might as well be asking how many people are necessary on the planet.

Simson also says in the press release, “Because the bill is so heavily favored to enrich the big webcasters, it raises questions as to who is really behind the SaveNetRadio Coalition.”. Here SoundExchange plays to the anti-business sentiment by indicating that SaveNetRadio is run only by large corporations and small webcasters are no part of it, which is a blatant lie on his part. “Although this coalition purports to be on the side of musicians, they have come out in support of this anti-artist bill. SoundExchange has reached out to various webcasters to explore ways to accommodate their needs.”

The SaveNetRadio Coalition was started by thousands of small webcasters like me who have done the math and quickly discovered that they cannot afford to continue to broadcast under the CRB royalty rate proposal. We banded together to fight against this proposal and the “Internet Radio Equality Act” is the fruit of those efforts. We should be not be forced to pay excessive royalty rates simply because we are on the internet. Satellite radio pays less, AM and FM pay this royalty only for their internet simulcasts. This Bill, should it pass, will not just help small webcasters like me; it will mean the difference between staying on the air and shutting down completely. This bill will allow the talk shows on ThereIsNoRadio to continue to broadcast and interact live with their listeners. It will also allow us to continue to promote the local bands, independent artists, and the music that we feel is not represented by mainstream radio. The Internet Radio Equality Act for us is comparable to the 1st Amendment to the U.S. Constitution providing freedom of speech. Without it, the unpaid voices of our talk show staff will be unfairly silenced.

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