Shady business in webcasting | Bleader

Shady business in webcasting

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A little while back I did a column on webcasting and the egregious royalty rate the RIAA's shill-men, SoundExchange, pushed through the Copyright Royalty Board. In it, I quoted a few theories from the webcasters at AccuRadio about how the rate hike might affect the industry, if it didn't demolish it outright. Daniel McSwain floated a theory that labels—specifically major labels, due to administrative complications that could effectively lock indies out of the process—might use a legal loophole to offer lower royalty rates to webcasters who agreed to play certain artists the labels were pushing. (And, incidentally, screwing over the artists that are supposed to be entitled to a cut of the royalty cash.) Excerpt: "This would allow the industry to 'dictate the look and sound of playlists,' according to McSwain. 'It takes away any autonomy from webcasters and puts it completely in the labels' hands.'" 

Including that idea in the finished piece was a tough sell to my editors, as it's impossible to prove that the labels intended to exploit a loophole they might not even know was there. Even I thought it verged on the kind of feverish hypothesizing that I recognized from reading too many books on conspiracy theories.

Tuns out we shouldn't have underestimated the majors. SF Weekly has broken the news that a new start-up webcasting service called Slacker.com has "stated in the press that it made direct license deals with the majors that have saved it the hassle of paying higher royalties." Reporter David Downs is calling the setup "dark payola": indebting the company to the labels' wishes with rate cuts rather than flat-out giving them money.

Major labels: making your most evil nightmares come true.

So, doesn't it sound like a good time to call your congressperson about the Internet Radio Equality Act? 

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