Golden egg? Fuggeddaboudit, gimme that carving knife!

Robert Klein cut his comedy chops with a routine called “The final record offer,” a spoof of those late-night television ads for special mail-order music collections.

“We bring them to your house in a truck,” he intoned.

A funny commercial a few years ago had a guy checking into a fleabag motel in the desert, to be told by the clerk that the in-room TV offered “every movie ever made.”

“How is that possible?” the guest queried.

Well, the movie industry opened the floodgates (from the music industry’s perspective) when it didn’t succeed in preventing home videocassette machines from recording broadcast content for personal use. A famous Supreme Court decision, Sony Corp. of America v. Universal City Studios, 464 U.S. 417 (1984) gave significant legal protection to personal home recording.

Now music company executives, who have arranged for us to repurchase our music libraries every time technology changes, are making up for lost opportunity by crushing every consumer-demanded opportunity for a new content channel.

Their support for copyright reform that will lead to massive increases in royalty payments from the nascent Internet radio industry is one more example of how clueless the recording industry has become, how out of touch with their customers, and frankly, how indifferent they are to what that customer base thinks of them.

While we do not advocate copyright infringement — indeed, much of the work we produce is protected by copyright, either for our companies or for our clients — we can understand why consumers of music content are frustrated and angry.

VCRs did not kill the movie industry, any more than TV killed radio (despite the 1980s Buggles’ song’s claim).

Many of us like the free-form content of Internet radio. It’s the only place to find album-oriented rock or alternative music, now that Clear Channel owns all of the radio stations in the world and programs trash talk and worse music.

Jonathan Schwartz

For those of us who grew up when Jonathan Schwartz essayed his way through the evenings on WNEW-FM, and Allison Steele, “the Nightbird,” haunted the fevered dreams of every male rock fan within earshot of 102.7 FM in New York, or Ed Sciaky on WMMR-FM, introducing listeners to Bruce Springsteen and Southside Johnny, Internet radio has become our refuge.

Allison Steele with John Kalodner

Ed Sciaky

Even more, it’s the only place where you can discover experimental, alternative, and just plain different music than what you get shoved down your throat by the overly commercialized broadcast radio outlets. Is it any wonder people would rather spend days ripping their (legally acquired) music CDs onto computers so they can load it on MP3 devices and never listen to the radio again?

We should be howling at the moon over Washington, where this deal with the ware-wolves of the music industry was struck.

Those of us who do podcasts would love to play songs from famous artists, but that would mean paying royalties to ASCAP and BMI, the two US licensing agencies. The only problem is they have no model for the tiny size of most podcast audiences, so they sell licenses based on radio station models.

As Tod Maffin of the Canadian Broadcasting Corporation found out when he tried to get a license from the Canadian counterparts of ASCAP and BMI, the costs are astronomical when the podcast generates $0 in revenue and only has 300-500 listeners. Conversations about a more rational formula appear to have died two years ago.

A quick visit to ASCAP’s website let me plug some numbers into their “rate calculator.” For a podcast distributed for free, with an audience of 500 listeners and $2,000 in sponsorship revenue (highly optimistic) ASCAP would expect a license fee of $288. That’s more than 10% of the revenue — and that’s only for one episode. That fee would apply for every episode in that series.

The unwillingness of the music industry to seek reasonable compromises has led consumers to do what they do best — invent circumventions.

We’ve already seen rock bands and other promising musicians recording their own albums without the dubious benefit of major recording labels charging all sorts of useless promotions and “artists and repertoire” personnel to the recording budget. We’re seeing “podsafe” music websites offering new artists’ works for free use in podcasts in return for links back to their band sites.

Now is the time to urge your elected representatives to stop this foolishness.

Read the Wall Street Journal coverage of this issue here:
Web Broadcasters Plan Protests Over Royalties: Web broadcasters are planning to turn off their music for one day to protest higher statutory royalty rates payable to artists. Many services say the new rate structure will put them out of business.

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