DCPolitics

Killing Internet Radio

Corporate cronyism takes on many forms in Washington, D.C. You have the standard “contributor gets government grant or tax break” cronyism that applies to Solyndra and many of the other so-called “green” grants in the Obama Administration. You have the General Motors bailout where union pension funds were protected while…

Corporate cronyism takes on many forms in Washington, D.C. You have the standard “contributor gets government grant or tax break” cronyism that applies to Solyndra and many of the other so-called “green” grants in the Obama Administration.

You have the General Motors bailout where union pension funds were protected while non-union ones were eviscerated. With corporate cronyism, political cash is king.

One of the more insidious versions of corporate cronyism occurs when a select group of bureaucrats – or an obscure government board -dictates the price of a product in a way that harms innovation and consumers. One example of this price fixing model is the reimbursement system set up by the Copyright Royalty Board (CRB) – a creation of the Library of Congress. The CRB is mandated by Congress to establish the rate which music labels should be compensated by Internet radio services and others for use of their music on a “willing buyer/ willing seller” basis.

This price fixing standard has proven to be a boon for the three major record companies which control about 80 percent of the copyrighted music as this music cartel has used it to cut off the growth of new music delivery platforms.

Platforms like Pandora, which is forced to pay such unrealistic rates to redistribute music that it cannot make a profit – despite having about 75 percent of the Internet radio market. While the consumer is increasingly choosing to access music and other entertainment using platforms that did not exist just a few years ago, current law effectively locks in 20th century thinking that constrains 21st century innovation.

While the consumer increasingly demands their entertainment content over the Internet, the development of profitable platforms to meet that demand is inhibited by a law which ignores the market value those consumers create.

In fact, the law even keeps possible innovators like Apple out of the market, because of the perverse disincentive created for music companies to negotiate truly market based rates under the current “willing buyer, willing seller” standard make negotiating a new, market-driven rate for Apple a non-starter.

Under the law, the ramifications of negotiating with Apple trickle down to other potential buyers who the record companies fear would be able to make the case for the same lower price points.

While well intentioned and even valuable at one point in our nation’s history, the current law governing the pricing of copyrighted entertainment no longer fits the demands of modern consumers or the innovators who are developing platforms that bureaucrats in the basement of the Library of Congress cannot imagine.

When no company in the 15-year history of webcasting has built a proven and sustainable business, and a company even as large as Apple cannot negotiate price points for content that would make entering a new market feasible due to a government price fixing structure that has been largely created to benefit one side of the two party “willing seller/ willing buyer” equation, it is time to change the system.

It is time to reform the system to create a structure which recognizes different markets and the price points for those markets, allowing the growth of alternative distribution channels.

It is time for real negotiations to be encouraged between content sellers and content buyers rather than the current one-sized fits all approach that is unrelated to the actual market place.

This is why Utah’s Jason Chaffetz’ Internet Radio Fairness Act is so important. Chaffetz seeks a balance between the new world realities of copyright content distribution and protecting the needs and concerns of those who hold the intellectual property.

Allowing the market to work more effectively and creating actual individual content negotiations between willing sellers and willing buyers is such an obvious step to catapult the next generation of music distribution channels forward, that it should be a no-brainer.

Let’s hope this Congress and the President give serious attention to Chaffetz’ proposals and allow the market to more effectively determine what copyrighted content is worth. In the end, the expanded market for copyrighted content distribution will benefit consumers through more choices due to innovation and the copyright holders as more people have access to their product.

This is the exact kind of win/ win solution that politicians in Washington should seek more often, if only the entrenched interests benefiting from the status quo would just get out of the way.

Rick Manning is communications director of Americans for Limited Government and the former Public Affairs Chief of Staff at the U.S. Department of Labor. Follow him on Twitter @RManning957.

***

Related posts

Politics

Tim Scott Can Hold ‘Bankers Gone Wild’ Accountable

FITSForum
DC

Ron Paul: Will The Fed Lose Control?

FITSForum
Politics

Palmetto Political Stock Index – 5/5/2024

FITSNews

16 comments

Rick Dees Official March 18, 2013 at 5:25 pm

Good news: Maybe pirate radio will make a comeback.

Reply
still lost at sea March 18, 2013 at 7:02 pm

What’s a radio, laddie?

Reply
Rick Dees Official March 18, 2013 at 5:25 pm

Good news: Maybe pirate radio will make a comeback.

Reply
still lost at sea March 18, 2013 at 7:02 pm

What’s a radio, laddie?

Reply
Smirks March 19, 2013 at 8:25 am

You’re talking about an industry that punishes actual customers with rootkits and DRM bullshit while pirates still download their shit for free without all that crap. An industry that backs absolutely abhorrent legislation like SOPA and PIPA to lock in their profitability at the expense of society.

Honestly, it is getting to the point where it is absolutely justifiable to just load up your favorite file sharing program, download whatever music you damn well please at a restaurant or something, and then mail a ten or twenty to the actual artists you “stole” from.

Hopefully one day the entire music industry evolves and the neanderthal music companies that spend millions to make Congress its bitch just go under. Maybe we are nearing that edge. Louis C.K. did his own thing selling a no-DRM copy of one of his comedic performances and made a good chunk of change. One can only hope that trend continues.

Reply
A Humble Chef March 19, 2013 at 2:54 pm

Several other comedians are going that route, so I heard. There are some “underground” musical acts that are doing things like using Kickstarter to finance an album and basically doing the same thing, distributing on their own. They are starting to find ways to cut the middle man out. If they can do it like Louis CK did and not get greedy charging a bunch of money, I think we’re looking at the future of personal entertainment purchasing. I wish them all luck! God knows something needs to change….

Reply
Smirks March 19, 2013 at 8:25 am

You’re talking about an industry that punishes actual customers with rootkits and DRM bullshit while pirates still download their shit for free without all that crap. An industry that backs absolutely abhorrent legislation like SOPA and PIPA to lock in their profitability at the expense of society.

Honestly, it is getting to the point where it is absolutely justifiable to just load up your favorite file sharing program, download whatever music you damn well please at a restaurant or something, and then mail a ten or twenty to the actual artists you “stole” from.

Hopefully one day the entire music industry evolves and the neanderthal music companies that spend millions to make Congress its bitch just go under. Maybe we are nearing that edge. Louis C.K. did his own thing selling a no-DRM copy of one of his comedic performances and made a good chunk of change. One can only hope that trend continues.

Reply
A Humble Chef March 19, 2013 at 2:54 pm

Several other comedians are going that route, so I heard. There are some “underground” musical acts that are doing things like using Kickstarter to finance an album and basically doing the same thing, distributing on their own. They are starting to find ways to cut the middle man out. If they can do it like Louis CK did and not get greedy charging a bunch of money, I think we’re looking at the future of personal entertainment purchasing. I wish them all luck! God knows something needs to change….

Reply
shifty henry March 19, 2013 at 9:15 am

Check out the Internet Archives which has FREE programs available for listening and downloading. It has radio programs, videos, music, books, historical news programs, and more. A few of my favorites are all of the Dragnet, Amos & Andy, Sherlock Holmes. There is are also historical programs, and even the Grateful Dead have their special category. Just browse around and you’ll find something to enjoy —- just follow the bouncing ball……..

———— http://archive.org/

Reply
Charlemagne, King of France March 21, 2013 at 4:32 pm

very few things on the internet are truely free, even google, mozilla, and the few other champions of the “free” internet raise money by selling ads. and theres nothing wrong with that. now google and FB have made a pretty hefty profit by selling your personal information as well which is terrible. but you dont see any identity theft suits being filed there do you.

Reply
shifty henry March 21, 2013 at 7:49 pm

Understand, but it is not either a subscription service or pay per play. I haven’t checked to see if donations are accepted.

Reply
shifty henry March 19, 2013 at 9:15 am

Check out the Internet Archives which has FREE programs available for listening and downloading. It has radio programs, videos, music, books, historical news programs, and more. A few of my favorites are all of the Dragnet, Amos & Andy, Sherlock Holmes. There is are also historical programs, and even the Grateful Dead have their special category. Just browse around and you’ll find something to enjoy —- just follow the bouncing ball……..

———— http://archive.org/

Reply
Charlemagne, King of France March 21, 2013 at 4:32 pm

very few things on the internet are truely free, even google, mozilla, and the few other champions of the “free” internet raise money by selling ads. and theres nothing wrong with that. now google and FB have made a pretty hefty profit by selling your personal information as well which is terrible. but you dont see any identity theft suits being filed there do you.

Reply
shifty henry March 21, 2013 at 7:49 pm

Understand, but it is not either a subscription service or pay per play. I haven’t checked to see if donations are accepted.

Reply
SparkleCity March 19, 2013 at 11:01 pm

Dear Mr. Manning (et al):

Where the hell were you (and others) a few years back when a similar situation reared its ugly head concerning Satellite Radio and led to an increase in subscription rates(which Mel Karmazin aka: “The Prince of Darkness”/”Lord do I love to sell advertising” planned all along and used it as excuse to raise the subscription rates)

Lord, I could write two pages worth concerning all the BS that went on with that!!!

Congressman Kole (sp) of Wisconsin was a champion for the rights concerning a number of issues concerning Satellite Radio and the FCC charter but he was largely ignored and is now out of office. He was the only one who gave a damn on these issues.

Thanks for being over 5 years late on this!!!

Reply
SparkleCity March 19, 2013 at 11:01 pm

Dear Mr. Manning (et al):

Where the hell were you (and others) a few years back when a similar situation reared its ugly head concerning Satellite Radio and led to an increase in subscription rates(which Mel Karmazin aka: “The Prince of Darkness”/”Lord do I love to sell advertising” planned all along and used it as excuse to raise the subscription rates)

Lord, I could write two pages worth concerning all the BS that went on with that!!!

Congressman Kole (sp) of Wisconsin was a champion for the rights concerning a number of issues concerning Satellite Radio and the FCC charter but he was largely ignored and is now out of office. He was the only one who gave a damn on these issues.

Thanks for being over 5 years late on this!!!

Reply

Leave a Comment