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Mom Turned Internet Broadcaster Calls On Congress And Copyright Board To Reverse Decision
By Mi2N
(more articles from this author)
2007-03-28
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The owner of one of the world's most popular comedy radio stations, Meander Comedy Radio, is worried about the future of internet radio. Dianne Lockhart's radio station and her dreams for the future are dashed to the ground by the recent ruling of the Copyright Royalty Board.

Her agreement with the royalty collecting agency, SoundExchange, under the Small Webcasters Settlement Act, was nullified by the March 2 ruling, despite the fact that she and others have paid royalties in advance. Thousands of internet radio broadcasters are in danger of having to shut down, and some may be looking at bankruptcy, as a result of this ruling. An entire industry faces extinction.

The owner of Meander Comedy Radio said she is now uncertain about the future of the popular internet radio station. Dianne Lockhart owns and manages two internet radio stations from her home in southern Colorado. Meander Comedy Radio, broadcasting to more than 60 countries worldwide, with its cleaner comedy format, is now ranked among the top 200 stations in the Live365 Network of approximately 10,000 stations, and on November 11, 2006, she launched a second talk format station, Solace Radio.

A new ruling by the Copyright Royalty Board threatens her enterprises and those of thousands of other legitimate internet broadcasters by annulling the Small Webcasters Settlement Act (SWSA), a document that she signed, in good faith, paying half of the performance royalty fee up front.

"After the March 2 ruling by the Copyright Royalty Board which, essentially, annulled my Small Webcaster Settlement Act (SWSA) agreement, I'm not sure what I'm going to do. This decision has the potential for ruining the businesses of thousands of broadcasters, including minority-owned stations, in one fell swoop, and many may be forced into bankruptcy because of this ruling," said Lockhart.

Broadcasters received a grave letter from the Live365 Network CEO Mark Lam on Saturday, March 10, which stated, "Of major concern to X5000 webcasters is the (Copyright Royalty) Board's removal of the Small Commercial Webcaster category that X5000 stations properly filed under with SoundExchange for both 2006 and 2007. The average X5000 station under these "per performance" rates will find their 2006 royalty obligation around $10,000, with some stations surpassing $40k. At current TLH, without any change in the new rates or streaming, some could find their 2007 SoundExchange bill approaching $100,000."

Broadcasters are urged to "save internet radio," to get the public to join in the petition for overturning the CRB determination and in the fight to save Internet radio. Everyone should make their voices heard by the lawmakers on Capitol Hill! Call, write, e-mail, and/or visit your Representatives and Senators today and request the following things:

--Congress void the retroactive $500 per channel minimum that threatens to drive Live365's small webcasters out of business.

--Congress reinstate the Small Webcaster Settlement Act. The CRB declared that the 2002 SWSA would not be extended despite the Small Webcaster contracts SoundExchange offered on its website and signed with Small Webcasters for 2006 and 2007.

--Stop the retroactive, ex post facto royalty payments for 2006 mandated by the CRB, until all appeals have been heard.

--Create a level playing field by bringing the Internet radio per performance rates into parity with traditional and satellite radio. Unlike internet radio, traditional radio does NOT pay royalties to record labels or artists for songs performed over the air.

In its decision, the Copyright Royalty Board reasoned, "It must be emphasized that, in reaching a determination, the Copyright Royalty Judges cannot guarantee a profitable business to every market entrant," and "it would involve the Copyright Royalty Judges in making a policy decision rather than applying the willing buyer/ willing seller standard of the Copyright Act."

Another Live365 broadcaster, SLT Radio Owner Travis Miller, disagreed, "We all know who the 'willing seller' is. It's the artists/labels. But who is the 'willing buyer'? The willing buyer, of course is the listener, who ultimately decides whether or not to purchase the music that he/she hears on a radio station. Radio, then, is the middleman, and in most, if not all, business models, the middleman receives a commission.

"For terrestrial radio, this commission has traditionally been in the form of payola (which is supposedly illegal), promotional copies of music, and advertising revenue. When it comes to Internet radio, however, the CRB has decided that the webcaster is the willing buyer and not the middleman that it truly is.

"So in reality, although the CRB is correct in stating that inefficient business models are typically weeded out (as they should be), they have completely misunderstood and misrepresented the Internet radio business model. In fact, I would further contend that they are attempting to apply two conflicting business models to the radio business as a whole.

"To further exacerbate the situation, many webcasters (myself included) are both willing buyers and middlemen. Over 97% of my broadcast music library is made up of music that I have purchased and then promoted to the listener. Add to that the exorbitant amount of royalty payments that are to be paid (as compared to terrestrial radio) and the result is that many, if not most, webcasters have become the willing buyer twice over.

"It is, therefore, no wonder that what meager incomes we might make from our roles as middlemen are not enough to cover paying for the same music twice (or, as some might argue, even more). In summary, the CRB is forcing upon internet radio the very business model that they have determined will not succeed."

"Unfortunately, most victims of this ruling are small broadcasters who haven't had the legal representation that the major labels have had, nor the Congressional lobby. Our very survival depends on being informed and involved," said Lockhart.

Related News from Mi2N:
» Mom Turned Internet Broadcaster Calls On Congress And Copyright Board To Reverse Decision


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