The new royalty fees, how many stations have shut down? Anybody know?

[gregg75]

Sorry guys, that other thread is just too long....and seems to have gotten off topic.

It would be interesting to know how many stations have now decided to close due to these high royalty fees. I would make a guess 10% or more by year's end. And if these rates had been in place when I started my station, I would not have started it either.

I would also gander that few new stations have started up at all in 2016. These fees will have consequences.

 

[Robert Bass]

There are still a number of Internet stations in operation. Some of them run talk programming which doesn't require the royalty fees, while others that do use copyright music block all USA listeners. I am wondering how much money the music industry has lost since the SWA went away.

R

 

[TheBigA]

I am wondering how much money the music industry has lost since the SWA went away.

The latest press release from the RIAA pointed out that streaming revenue topped $2 billion for the first time ever. What it means is that most people who stream do it from established major music platforms like Pandora, Spotify, and Apple Music, rather than small privately run webcasters.

 

[Robert Bass]

The latest press release from the RIAA pointed out that streaming revenue topped $2 billion for the first time ever. What it means is that most people who stream do it from established major music platforms like Pandora, Spotify, and Apple Music, rather than small privately run webcasters.

That was for 2015. I'm talking about 2016, the year the SWA went away.

R

 

[joebtsflk1]

It pains me to say that we independent niche webcasters had been a rounding error as far as actual revenues were concerned prior to 2016. I can tell you TheRenegadeRoadhouse.co went dark 1/1/16.

We were paying 3¢ per 100 songs. Broadcast radio was paying 25¢ per 100, for 2016 it dropped to 17¢ per 100.

Put another nickel in the nickelodeon...the only way I can see coming back is via a subscrription model.

 

[Robert Bass]

Tiu were paying per song in 2015? Sounds like you weren't on the SWA, as that was a one time flat rate of $2,000 a year.

R

 

[MarioMania]

What's SWA?

 

[davideduardo]

What's SWA?

Small Webcasters Agreement, which ended earlier this year. It gave small webcasters much lower rates.

“Under the small webcasters agreement, it’s for services that do under $1.25 million a year, and under 5 million listener hours. Ten percent of the first $250,000 in Gross Revenues, and 12% of any Gross Revenues in excess of $250,000, during the applicable year. Or 7% of Expenses during the applicable year.”

http://rainnews.com/mid-size-and-small-webcaster-reaction-to-new-crb-rates/

 

[TheBigA]

That was for 2015. I'm talking about 2016, the year the SWA went away.

The growth in streaming from the major sites exceeds any losses from small webcasters.

 

[TheBigA]

Put another nickel in the nickelodeon...the only way I can see coming back is via a subscrription model.

That is what the labels want. They don't like free streaming. So getting rid of small webcasters means less free streaming.

 

[K.M. Richards]

The latest press release from the RIAA pointed out that streaming revenue topped $2 billion for the first time ever. What it means is that most people who stream do it from established major music platforms like Pandora, Spotify, and Apple Music, rather than small privately run webcasters.

That was for 2015. I'm talking about 2016, the year the SWA went away.

I think it should be fairly obvious, Robert, that if streaming revenue topped $2 billion last year, the shutdown of practically all independent streams will push that number higher as the established majors pick up the disenfranchised audience. In other words, saying "that was last year" under the circumstances is no counter-argument at all.

 

[Robert Bass]

Well K.M. I don't agree, especially if all that is left is "corporate" net radio providing nothing more than what Terra radio is already doing. I have no doubt the tables will turn against the shutdown of Internet stations, I believe it's just a question of "when".

R

 

[TheBigA]

I don't agree, especially if all that is left is "corporate" net radio providing nothing more than what Terra radio is already doing.

Have you used Pandora or Spotify? Neither is doing what OTA radio does. In fact, they specialize in unhosted music distribution. No DJs. Very different from OTA.

 

[K.M. Richards]

I have no doubt the tables will turn against the shutdown of Internet stations, I believe it's just a question of "when".

People said the same thing about the change in ownership limits under the Clinton administration. "Oh, the tide will turn ... too much concentrated ownership will cause problems ... they'll undo it before long."

Instead, the limits got further relaxed. And the reason? Because the consolidated corporate entities have the bucks for lobbying Congress to rewrite the rules their way. If you think for one minute they're going to lobby to undo this change, which in one fell swoop eliminated those pesky "hobby" Internet stations that steal listeners from their stations' simulcast streams, you are kidding yourself.

And the small Internet webcasters will never have the resources to compete with the lobbyists.

It's all over except for the shouts of "hurrah" from the corporate boardrooms. Last stream shutting down please remember to turn off the lights.

 

[Robert Bass]

TBA, Pandora is losing money hand over fist, and pretty much always has been...

Again K.M., I disagree. We'll just have to agree to disagree on this one.

R

 

[davideduardo]

TBA, Pandora is losing money hand over fist, and pretty much always has been...

But don't you think that the larger streamers perceive a benefit from having the smaller ones go away? The business model, however, does not seem to benefit from more users as their royalty costs increase proportionally. Any gain would have to be in operational economies of scale and that is where reducing competition is an advantage.

 

[Robert Bass]

But don't you think that the larger streamers perceive a benefit from having the smaller ones go away?

No I don't, and that's part of the reason why I believe the tide will turn.

R

 

[davideduardo]

No I don't, and that's part of the reason why I believe the tide will turn.

Considering that the small streamers did not even present a formal case to the regulatory board, it is unlikely that there could or would be any change until the next revision of fees. For all practical purposes, that train has left the station.

The record labels will see no benefit from the smaller streamers, just as they did not service 45's and promo CDs to smaller radio stations. The artists when presented with streamers that signify high potential revenue, are not going to be easily sold on a cut rate for smaller streamers. Only the artists without hits will want the exposure, and they generally have no allies.

 

[TheBigA]

TBA, Pandora is losing money hand over fist, and pretty much always has been...

That's not the issue. The reason they're losing money is because they pay 70% of revenues to SoundExchange. They are the #1 payer, and they pay regardless of their financial status. For that, they get a standing ovation from the music business. If SoundExchange gave them a discount, or charged them a set rate, they'd be making money. But they didn't get a discount in the latest CRB decision.

You're welcome to do that too. You're welcome to lose money on your internet radio station. No one told you to shut it down. You did it yourself.

 

[TheBigA]

Only the artists without hits will want the exposure, and they generally have no allies.

The artists without hits are the biggest complainers when it comes to the rates. They show their royalty checks and ask "where are my millions?" Of course the reason they're not making money is because their music sucks. But they don't see it that way. They feel if the rates were higher, they'd make more money. I have never heard a small artist campaign for the Small Webcaster Agreement.