DURHAM HERALD-SUN  (June 28, 2002)

Internet radio fee to hurt indie artists / Philip Van Vleck

The furor caused in the music industry by MP3 technology and the attendant ability to share audio files via the Internet has been with us long enough that anyone who cares about this problem is familiar with the knotty details. The future of Internet radio, on the other hand, is an issue that’s as contentious as MP3 technology, but it hasn’t been reported as frequently in the media as has the audio file-sharing fuss.

On June 21, a CNN.com story, datelined Washington, D.C., reported that the U.S. Copyright Office had decided to charge webcasters 70 cents per song heard by 1,000 listeners. This fee was half of what a government panel had suggested in February.

Both sides of the Internet radio issue expressed displeasure with the decision. John Potter, executive director of the Digital Media Association, noted that the rate was still too high. John Jeffrey, vice president of Live365 Inc. -- the largest Internet radio network -- reacted to the rate decision by remarking that: "This is a rate that still means the majority of independent webcasters will cease to operate." He added that the 70-cent rate would probably cost his company $100,000 a month.

Cary Sherman, president of the Recording Industry Association of America (RIAA), believes the rate is too low, noting that it, "simply does not reflect the fair market value of the music."

As the RIAA proved during the Napster controversy, this organization is only concerned with the profits of the major record labels. Indeed, the RIAA’s position vis-à-vis musicians could, as often as not, be described as adversarial. It would be far-fetched to assume, therefore, that Cary Sherman’s remarks reflect, in any substantive way, those of musicians, particularly indie artists.

Nashville-based singer/songwriter Doug Hoekstra, on the other hand, is an indie artist with unimpeachable street cred. He’s released five albums (six in Europe) on indie labels, he runs his own Web site, produces his albums and has done most of his own marketing since 1994. When asked about his take on the U.S. Copyright Office’s decision regarding the 70-cent fee to be imposed on webcasters, he had a distinctly different response than that of Sherman, Potter or Jeffrey (CNN.com did not bother to sound musicians on this matter).

Hoekstra noted that: "I suspect that if they’re going to come up with a model to pay people, it’ll be performance rights money, and that, to me, is slanted against the indie performer. As any indie artist will tell you, what airplay they get comes from NPR or college radio or in Europe, and it’s questionable how much of that you get paid for because the money comes from a BMI or ASCAP collection pool. How you’re paid seems to depend on how well you’re doing. If you challenge them on this, they’ll tell you that a lot of their collection is random. It amazes me how I’ll do nationally syndicated shows like "Acoustic Café" or "World Café" and not see a dime from it.

"If they follow that model for paying artists for webcast play, it’ll hurt indie artists because it’ll be structured in favor of people like Sheryl Crow, you know, people they can track," he added. "Plus the major labels have more power, so their artists will be the ones to whom attention is paid in terms of tracking their Internet radio plays.

"The majors are fighting over this money, but not for the sake of the artists," he said. "And, once again, the independent artist is the one who’s not even in the picture. Instead, it’s another battle between the Internet people and the major labels. Meanwhile the indie artists are either happy to give away their music on the Internet, or they don’t have any choice because sites like Napster are letting people steal music."

Whereas the independence and integrity of Internet radio might have been worth fighting for 10 years ago, Hoekstra’s not so sure it’s worth the trouble now. Citing the Pandora’s box that is MP3 technology, he noted that "back in the day" someone might have heard one of his songs on Internet radio and gone looking to buy the album. Now, they go looking for MP3 files to download.

"I guess that’s cool," Hoekstra said. "[On] one level, you could say that this increases my fan base. It does have that element, and at least with MP3 I can control what I put on MP3’s Web site. But, on the other hand, I gotta make some money, and I’d like to see people go buy the album."

What’s implicit in Hoekstra’s remarks is that he’s not being paid for MP3 downloads. Let’s make it explicit. MP3 has tracked 2,495 total plays for Hoekstra songs on their Web site. He has never been paid for any plays on MP3.com.

If other indie artists have a similar MP3 experience, then what’s the point of getting Internet radio airplay? So people can steal their music from MP3? Maybe that’s OK for hobbyist musicians, but for artists trying to make a living from their music, it’s not OK.

Cary Sherman thinks 70 cents per song played is too low. John Potter thinks the fee is too high. Doug Hoekstra is pretty sure neither of them care about the economic rights of independent musicians.

Hoekstra will be performing in the Triangle on July 13 at Six String Café in Cary. Check www.sixstringcafe.com for info. \

Philip Van Vleck charts our world’s music from digs in Cary. reach him at vanvleck@nc.rr.com.

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