Mum's the Word
Potter is talking about the Recording Industry Association of Americaâ€"-the trade organisation most recently in the news for suing Napsterâ€"-and its mouthpiece, a new RIAA subgroup called SoundExchange.
According to its Web site, SoundExchange consists of record labels "united in receiving a fair price for the licensing of their music in a new digital world." Exactly how fair we'll never know. SoundExchange executives did not return repeated telephone calls requesting comment on this story.
Now that the RIAA has gotten its way, bankruptcy seems likely for Webcasters unable to pay the royalties, thanks to an unforgiving economy and still-depressed stock market. Most notably, since the litigation began, former high-flying Net broadcaster iCast has been forced to cease operations.
How bad the damage will be for the rest of the industry remains to be seen. None of the still-surviving major Webcasters would speak to us on the record about the royalty issue, invariably citing a confidentiality agreement with the RIAA.
Up next: more arbitration. In December the US Copyright Office set an arbitration schedule to determine the rate at which Webcasters will have to pay record labels to use their material. April 2 was the deadline for submitting rate proposals. Counterproposals and counter-counterproposals will likely stretch over the rest of 2001, with hearings beginning July 30.
After all this posturing, the prognosis appears simple. Potter expects that Webcasters will end up paying "a percentage that's in the low single digits" of their online advertising revenue, though he says some industry members would still like to pay on a per-stream basis. "The rate will get set, and people will pay it," Potter says. "Our goal will be to make sure we aren't discriminated against simply because we're Internet-based."
The internet won't kill the radio star, the recording industry will kill the internet.