With the weakened world economy, content in general faces plenty of gloom and doom. Advertising models are severely weakened. But, oddly, in the world of music, there are some positive signs that the shift to decentralized, online distribution might actually be going well — and maybe economic pressures are simply ensuring the parties involved find some way to make the adjustment.

And music distribution is becoming wonderfully weird and diverse – maybe far more so than in recording’s so-called golden age, an era in the past dominated by racial division, predatory labels, and a few dominant big businesses. (Money is tough as always, but it does make you wonder why we complain so.)

This may stretch your definition of “good news” for webcasters, but the latest on the Internet Radio crisis runs something like this:

Webcasters don’t yet have to pay new fees for their broadcast. But they’re still accruing debt — fast. Sort of like our credit card debt.

Webcasters may get a small break on the minimum fee, one that could literally have shut down “personalized” radio services. SoundExchange explains the deal thusly:

Under the new proposal, to be implemented by remand to the CRJs, SoundExchange has offered to cap the $500 per channel minimum fee at $50,000 per year for webcasters who agree to provide more detailed reporting of the music that they play and work to stop users from engaging in “streamripping” – turning Internet radio performances into a digital music library.

Note the big attached “ifs”, which are vaguely worded in the official SoundExchange announcement, and sound all the more threatening given, according to SoundExchange, the previous rates are already in effect. Whichever side you’re on here, you have to give SoundExchange some credit for, erm, negotiating skill. “Hey, so while you’re dangled over this bridge, I wonder if we might … negotiate some small items?”

The one shred of good news: apparently Congress has applied some pressure on SoundExchange to negotiate, meaning public action has actually made some difference. Whatever the ultimate solution, it’d be nice to think some sort of public involvement might push the government to do something effective.

Wired has some good reporting on this:
Net Radio Wins Partial Reprieve as Royalties Loom

Meanwhile, I have a partial vacation to get back to. See you soon.

Several readers have observed this quite eloquently, but let’s summarize: laws around music are complicated, messy, and confusing. If they don’t seem that way to you, you’re either a lawyer or you haven’t done your homework. That said, without question, proposed changes to streaming music licensing fees would be devastating to Internet radio, because not just top 40 music requires license fees — even many indie labels are RIAA members and participate in SoundExchange. But here’s the key: they’d be devastating as proposed. And suddenly, at the eleventh hour, SoundExchange seems to be backpedaling. (Their strategy, evidently: push as hard as possible until the last conceivable moment, then find a deal that works for them — while they retain the upper hand at the bargaining table. Surprise, surprise.)

Hear that? Nothing. No, it’s not silence making a political point, as with the Internet Radio Day of Silence staged last week by web radio to protest punishing new royalty rates by showing what they could cause. This is an even more disturbing silence: as the deadline for new US rates for Net radio approaches, online radio’s supporters seem to be desperate and exhausted.

Here’s the problem: net radio supporters, concerned that new rates (and the backdated royalty rates that would be owed along with them) could kill Internet radio, haven’t exactly gotten a lot of good news lately. They’ve failed to stop the new rules in the courts: the U.S. Court of Appeals denied a “motion to stay” that could further postpone the ticking clock. And, despite overwhelming public support that jammed fax machines and stunned Members of Congress, the U.S. Congress has failed to actually bring a bill to the floor. Members were happy to co-sponsor legislation and say nice things to supporters, but not actually try to pass the legislation itself.

Barring any further action, Net radio is going to have a massive bill sitting on its desk this coming Monday. It’ll cover not only the new rates, but months and months of back-dated rates. With public broadcasting in a dire situation already, and independent music struggling to come into its own via fledgling Web outlets, that seems like really bad news.

Interestingly, one major outlet — one we’re big fans of here at CDM — disagrees. Last.fm argues that this is much ado about nothing, not because they’re a UK-based company (international broadcasters are subject to US rules — sorry, guys), but because they’ve managed to negotiate independently with the labels to get rates that work for them. That’s great — for Last.fm. But I question just how relevant this is to anyone else. Aside from the fact that not every single broadcaster can — or should have to — negotiate independently with labels, there’s also the fact that Last.fm can do its own programming around what it’s able to license. That isn’t the case for, say, a college public radio station doing a webstream of its usual programming. Given the strong material evidence presented by other broadcasters, it would seem that, despite Last.fm’s smug, broad pronouncements (ironic coming from a company owned by CBS), their situation is unique.

That means one thing: it’s time to hit the phones, Americans. (Hello, Rest of the World — while our laws may indeed wind up punishing your radio, too, I’m afraid there’s little you can do, other than call your American buddies and tell them to call.)

Call your Senators (you’ve got two of them) and your Representative (one of those). You can find the information here:

Capwiz.com Townhall Contact Info

And, as I’ve said before, there’s all the reason for independent artists to make this call. The new royalty rates in the Congressional bill aren’t perfect, but they would establish a framework for setting fair rates across media in the future. The idea is not to eliminate royalties; it’s to set it a rate that expanding media outlets can cover. More growth for listeners could ultimately mean more royalty rates. And by protecting independent online outlets, artists have an opportunity to ensure the growth of digital media as a means of promoting their work, which can funnel money into better revenue sources for us, from commissions to album sales to live music ticket sales.

For more on the indie artist perspective, see Independent Artists Fear the Demise of Internet Radio from The Baltimore Sun on (ironically) July 4.

Feel free to let us know how your Congresspeople respond here in comments. And let’s hope that this largely inactive Congress can at least bring this important debate to the floor, rather than remaining silent themselves. Wherever you stand, total inaction is the worst kind of silence of all.

If you switch on your favorite radio stream and hear something unusual — people talking about Internet policy, ambient sounds, or nothing at all — you’re getting a glimpse of a world that could be here by next month. To illustrate the devastating effect new US royalty rates could have on online broadcasters, broadcasters large and small are making today, Tuesday, June 26, a “day of silence.” They’re not just being dramatic: online broadcasters from public radio stations to big services like Rhapsody have said they simply won’t be able to swallow the new rates. Small broadcasters don’t have the money, and big broadcasters can’t justify losing money to shareholders. (Worse, the rates are retroactive, so this could really damage already-beleaguered American public broadcasting.)

Here’s why the rates are bad, and how to take action today.