The RIAA Will Kill The Music Industry

A long time ago, seemingly in a galaxy far away, a man named Marconi discovered that you could detect invisible electronic impulses floating around in the air and, if you modulated the amplitude (and later the frequency) of these impulses, they made sound. It was called radio. Thanks to a man named Edison, who had figured out how to capture sound on a wax (and later vinyl) disc, there was something to share using this new invention.

As it grew, one of the primary uses of radio was to sell records. Artists, managers and record companies knew that if you weren't on the radio, the records didn't sell. They also knew that if you were on the radio a lot and the DJ told all of his listeners over and over that the music was good, the records sold very very well (today, we call this the boy-band effect). This led to its own set of problems but the basic truth was that if the general public heard the music, they would buy the music.

Today, the recording industry has changed as have the delivery methods for recorded media. But that basic truth still stands: If you play it, they will buy.

Recently, the Recording Industry Association of America (RIAA), a trade group consisting of a large number of private corporate entities such as record labels and distributors, who create and distribute about 90% of recorded music sold in the US*, went after internet radio. "[A] new royalty structure was enacted by the Copyright Review Board in March" under which "webcasters will have to pay a flat fee per song streamed on a per-user basis, along with a $500-per-channel annual administrative fee. In addition, the royalties are retroactive to January 2006 and are scheduled to double by 2011."**

Let's add that up. Let's assume you have a listener base of 200 people at any given time and the fee is 8 cents per song per user. For every song you play, you have to pay the artists $16.00 (.08 * 200). This is on top of the licensing fee you're already paying to the composers - the same (and only) fee traditional radio stations pay. Now, let's assume you play 10 songs per hour. That's $160.00 per hour you pay in royalty fees. The system is completely automated so you're on 24 hours a day which comes out to $3,840.00 per day which translates into $1,401,600.00 per year. The fees are due October 20 and are retroactive to 1998. It's no wonder that several radio stations that used to stream their content have stopped doing so and several small and public stations have shut down altogether.

Remember the rule? Airplay = Profits. By imposing this fee structure - which I have to wonder about the ethical, legal and moral implications of letting a trade group dictate public policy - the RIAA and the Copyright Royalty Board are reducing the number of outlets where people can listen to music.

Now, it appears that the RIAA is going after satellite radio.

When does it end? When does the RIAA finally stop ignoring the constitutionality of due process and the legal copyright issues of fair use and home recording? When will this trade group be told they are no longer allowed to create laws - only Congress can do that? When do the McCarthyistic tactics of the RIAA, whether attacking private or commercial interests, finally cause enough of an outcry that the world finally says to them, "Have you no sense of decency? At long last, have you left no sense of decency?"


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* Source: Wikipedia
** Source: ars technica