Hip
Hop May Not Be Dead,
But Internet Radio May Soon Be
By Davey D
04 June, 2007
DaveyD.com
A
few years a ago I ran into former FCC Chairman Michael Powell as he
was leaving Jesse Jackson's Wall Street Project conference in New York.
He was the man of the hour due to the fact that over 3 million people
had hit up the FCC demanding that he abandon his plans to allow big
media conglomerates like Clear Channel to further consolidate.
I confronted Powell about
many of the complaints I was hearing from media reform activists around
the country including the Bay Area's People Station Campaign, Detroit's
Black Out Friday campaign and the ‘Turn off the Radio Campaign'
which drew 1500 people including Chuck D, Afrika Bambattaa, Doug E fresh
and numerous other rap stars and launched in a Harlem church the night
before.
It was there that members
of New York's City Council held a tribunal and listened to over six
hours of testimony where person after person complained about lack of
musical diversity resulting in listeners having to endure the same ten
songs in row, the lack of local airplay for independent local artists
and an abundance of harmful stereotypes being broadcasted everyday resulting
in Black and Brown communities being marginalized. The most troubling
was the management of New York's then number one station Hot 97 allowing
their on disc jockeys to constantly use the N and B words on the air.
Powell listened and then
dismissively told me the solution was not to regulate radio and prevent
further consolidation but for concerned listeners to turn to the Internet
radio. It was there he stated that people could find all the diversity
and niche programming their heart desired. I tried to explain that a
lot of people especially in poor communities where broadband was scarce,
couldn't listen to Internet radio. Sadly Powell wasn't trying to hear
it and he bounced.
Fast forward 4 years later
and people faced with little changes in radio found their way onto the
Internet and an industry that once boasted a scant few million listeners
a month now has mushroomed to a medium that attracts over 70 million
people. Apparently people got Powell's memo.
In a cruel sense of irony,
what has become a viable alternative and a place of solace for many
is threatened. In recent weeks while the country was focused on Don
Imus, the major record labels along with their organization Sound Exchange
successfully petitioned the US Copyright Board and convinced them to
increase royalty fees a whooping 300-1200% to be applied retroactively.
The rates which were supposed to kick in May 15th threatened to bankrupt
the Internet Radio industry.
Just to give you an idea
of how that looks, locally based Soma FM in a recent Eastbay Express
article explained that they had an annual webcasting bill for 10 thousand
dollars. Under the new rates they would immediately owe 600 thousand
dollars. I spoke with owner Rusty Hodge who noted that the high rates
are the result of him having lots of people who listen for long periods
of time. He also noted that if he manages to stay afloat in 2007 he
will owe the labels over one million dollars.
The largest Internet Radio
company, Live 365 - also locally based - explained to the Washington
Post that their annual 1.5 million dollar bill would increase to 6 or
7 million and bankrupt the company.
What makes this new ruling
even more insidious is that all webcasters no matter how big or small
would be required to pay 500 bucks annually on top of the increased
rates, meanwhile commercial broadcasters who have in recent months been
aggressively pushing their own online stations and HD broadcasts along
with satellite radio would NOT be paying these increased rates.
If you listen to commercial
stations all around the country you will hear many of them pushing for
listeners to check out their new online spin off stations. The ultimate
plan of action for many stations is to launch specialty stations that
focus on a specific genre. For example in New York City, Hot 97 now
has a online station called the 'Original Hot 97' where listeners can
hear the station in its original dance music oriented format. Here in
the Bay Area, Kiss FM which plays classic R&B and soul has launched
an online station where they play classic commercial Hip Hop.
Now this in itself is not
a bad thing except the playing field is not even. For starters the commercial
outlets at the very least they will be able to barter with major labels
to overlook online fees in exchange for terrestrial airplay. What also
is not being stated is that for the commercial giants this will be the
place where they can legally exercise pay for play (payola) especially
if they wind up being the only game in town.
A likely scenario that will
soon emerge (if it hasn't already) is that labels seeking airplay will
hit these commercial giants off with a set amount of money and then
after the stations 'determine' that the songs are doing well online
will then bounce them up to regular rotation on the terrestrial stations.
The pay-for-play scheme online will be a welcome cash cow for commercial
stations while labels will be able to exercise control over projects
that they are promoting.
For those who don't know,
the way things work now, is that a major label comes up with a marketing
campaign for a particular artist. They set up a marketing campaign with
the album's first single followed by a video. They depend upon broadcasters
to go along with their game plan. They expect stations and video outlets
to play the second and third singles at the prescribed time and will
actually discourage programmers from playing album cuts or upcoming
planned singles 'too soon'. In some instances labels will use their
muscle and threaten to stop servicing stations with music or will prohibit
their artists from doing interviews or summer jam concerts if the broadcasters
don't cooperate with the marketing plan. This focused marketing is what
many of these label executives feel will lead to increased album sales
and the main reason why you hear the same ten songs being played on
air from coast to coast.
Internet Radio helped break
that stranglehold. With the average webcaster it's usually been people
first, not labels first. The industry seems bent on changing this dynamic.
The first step is to eliminate all these independent Internet Radio
stations by making it too costly.
For those who think what
I'm saying is far fetched, talk to any online broadcaster and ask him/her
about the 1998 DMCA (Digital Millennium Copyright Act) which governs
Internet Radio and was pushed through Congress by the RIAA and the major
labels. It is technically against the law for Internet radio to play
songs from the same artist 2 or 3 times in a 3 hour period. Hence unlike
commercial giants who can break format and do a Prince special or have
a Jay-Z or Public Enemy hour, webcasters are forbidden to do this by
law. When James Brown passed late last year and Rick James passed the
year before, radio stations all over the country broke format and played
hours of music from these legends. Thanks to the DMCA, Internet radio
was forbidden to do this unless they got special permission from the
labels which was damn near impossible for most people who actually go
out and purchase their own music as opposed to commercial stations which
get it sent to them for free and have relationships with record label
promoters.
The Sound Exchange people
said they need to raise rates and make all these rules for the benefit
of the artist. They said that because album sales are down and that
the industry needs another income source. Webcasting fees will help
offset the economic downturn. They also stated that they were doing
this for the artists who they feel need to be paid.
Well, according to Wendy
Day of the well respected artist advocacy group Rapcoalition that's
not exactly true. Day, who is responsible for brokering deals for artists
like Master P and Cash Money, stated;
"From the negotiation
standpoint in the music industry, the major labels are fighting hard
to retain as large a percentage as possible for digital rights. Much
like record deals of the past (old formats such as records, cassettes,
and CDs), the labels retain the lion's share of the profits giving the
average artist a lowly 12% of the selling price AFTER they've paid back
every recoupable expense from their share of the royalties. That business
model still stands in digital formats. The labels still keep the lion's
share of the money, using the artists' measly percentage to pay down
the debt. I have, personally, seen labels budge on allowing artists
to be non-exclusive to their label, but not give an inch in negotiating
digital rights. Artists still get pennies in comparison to the labels'
dollars."
The Sound Exchange people
have also stated that webcasters can easily pay the increased fees by
selling advertising. That's a huge fallacy. To start, what wasn't stated
by SE was the fact that these small webcasters are now in direct competition
with traditional broadcast giants who are going after those same ad
dollars for their own online webcasts.
In short the chips are stacked
against the average online broadcaster who was chased on line by Powell
and the lack of response by broadcast mediums to their initial concerns.
The little guy who does this
as a passionate hobby where he was willing to pay reasonable rates is
suddenly up against a huge company with a sales staff that at the end
of the day can barter for ad dollars with a variety of on and offline
platforms. As I said before, Internet and digital broadcasting is new
terrain that the industry wants cleared out with them being the only
game in town. If that happens all the same complaints consumers had
and continue to have with traditional radio will resurface with these
commercial online outlets.
So disconcerting is this
latest assault that there has been a groundswell of support and broad
coalition of groups opposing the rate hikes ranging from Christen broadcasters
to Yahoo radio. The end result are two bi-partisan bills being pushed
through Congress and the Senate. In the House its HR 2060 and in the
Senate S1353 the Internet Radio Equality Act, which would repeal the
rates. People are asked to call their representative and get behind
the bills or risk seeing the Internet radio landscape permanently change
and be a thing that only the rich and powerful can afford to do.
Journalist and activist Davey
D can be contacted at [email protected].
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