Posts Tagged with "pandora"

Why We Do Not Need the Internet Radio Fairness Act

October 12th, 2012 at 7:15 pm by Mark
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     On a serious note for a minute…

     Many people claim that the Recording Industry Association of American (RIAA) and others have wanted to “get back” at the Internet for their losses over File Sharing sites. That’s probably true, right? We constantly see the RIAA going after file sharing sites and filing DMCA requests removing content from YouTube! and other sites.
     And now there’s all this bit about the “free” music sites. Internet Radio stations such as Pandora, for instance, are charged more than 50% of their revenue stream for Music Royalties, whereas Sirius XM Radio only pays about 10% of its revenue stream. Legislation known as the Internet Radio Fairness Act of 2012 seeks to “level the playing field” between public, private and internet Radio stations, making rules which allow Internet radio stations the same low royalties as Radio Stations.

     Sounds like a great idea, right? I certainly feel for the Internet Radio stations. I honestly do. Some “greedy corporation” is making Internet Companies pay 50% of their revenue in royalties, and that’s not fair, is it?

     But… Let’s apply some logic here: Aren’t these Internet Companies private businesses who want the government to help them make more money? Doesn’t make them yet another “greedy corporation?”

     As you know, Pandora is a “free” Internet radio station which, much like a real radio station, makes its revenue as with Advertising. SiriusXM, on the other hand, makes its revenue using a paid subscription service without Advertising. Already, that means, proportionally, there’s going to be a huge gap — SiriusXM is making money hand-over-fist with its monthly Satellite Radio Broadcasting service, where Pandora, even having millions more subscribers, is only making fractions of cents for displaying ads.
     The basis is that the RIAA is charging Internet Radio Stations *more* than they’re charging Sirius, and that they’re being unfair, charging a fixed price for music royalties.
     But what would you say if I told you that neither statement is even true?

     Basically, even though it’s called the Internet Radio Fairness Act, Pandora wants the Government to force the RIAA to charge them less for royalties than what SiriusXM is paying.
     What’s fair about that?

     The fact is, we do not need an additional enforcement body created to dictate the practices of private business. Quite simply, they should be able to negotiate, however fairly or unfairly, without using our Federal Government as a damn referree.

     Where is the impetus for passing this Bill, except to give Government another surface to attempt to regulate? When have we become so entirely stupid that we “ask” the Federal Government to help us run our business for us? What jobs are going to be created by passing this bill?
     At the end of the day, Government regulation, even when it’s as simple as Rulemaking, always has longstanding, unintended results. Seriously, when’s the last time the phrase, “Hi, we’re from the Government, and we’re here to help you!” was a good thing?

     I’m sorry. The onus here is on Pandora. Fifty percent of their revenue is going to pay for music they’re rightly broadcasting. If they can’t afford that, they need to come up with a different revenue model, rather than asking for a handout from the Government.
     Has anyone bothered to ask where other fifty percent of the revenue is going? And they’re getting tons in donations right now that’s supposed to be going for Legal bills, but how can we be sure? I mean, they’re a small corporation… who don’t provide any jobs… which makes them quite a bit different from other companies looking for a Government bailout, like, say, General Motors…

     And believe me, I’m no fan of the RIAA. Being as powerful as they are they can do whatever they want, including raising Music Royalty rates across the board, jeapardizing every radio station in America. That’s truly a sad state of affairs.
     But there’s where the solution is: Instead of asking Congress to write a new law to give these businesses a repreive, why not band together and play Royalty Free music for a month just to show the RIAA what a loss of revenue feels like?

     In the immortal words of Noah Webster:

Corrupt or incompetent men will be appointed to execute the laws; the public revenues will be squandered on unworthy men; and the rights of the citizens will be violated or disregarded.

     The easier solution is to insist that the Federal Goverment, especially Congressmen and Senators, deny the RIAA — and even its opposing groups — their right to Lobby as Special Interest Groups. That would screw a lot of Washington out of their own personal revenue streams, and hopefully make them wake up and pay attention to what they’re voting for and against on a daily basis…

     And if they can’t do that … We can always go to the voting polls.

Note: For more information about the the Internet Radio Fairness Act, see the Official US Government edition at THOMAS.