Artemis of Reason

Just because the labels can charge royalties doesn't mean they should

Maybe it's expecting too much to want the major record labels to step back for a moment and rethink their stance on music and the Internet. They've spent so long treating their most fanatic consumers (i.e., the ones so geeked up about music that they spend hours online downloading the stuff) as adversaries rather than as potential customers that it's perhaps unreasonable at this late stage to ask for a little common sense and perspective. But all the same:

Whaddya say, major record labels? Please? Just a little perspective?

Consider the poor Webcasters, the ones who'll have to pay royalties of 0.07 cents per listener per song -- retroactive for four years -- starting in October. (Trust us, it adds up.) The librarian of Congress set that rate in June, simultaneously pissing off both the record industry giants, who wanted more, and the Webcasters, many of whom just can't survive with those fees. Now the House of Representatives is getting into the act, with Virginia Democrat Rick Boucher spearheading a new bill that would exempt small-time Web-based radio stations (companies with less than six million dollars in annual revenue) from paying the full royalty.

Naturally the Recording Industry Association of America is against the legislation -- RIAA executive director John Simson told Billboard magazine that it helps Webcasters "maintain business models that have not proved themselves able to succeed in the free market." And you know what? He's right. (Hate when that happens.) The government shouldn't be cutting small-time Webcasters breaks just because they don't make much money.

They shouldn't have to. The labels should be doing it. And the reason the labels should be doing it is because it makes good sense -- for them. So far only Artemis Records seems to understand this.

Artemis, the independent, New York-based home of Steve Earle, Jay Farrar, Nashville Pussy, and a host of old-timers (Rickie Lee Jones, Boston, and Warren Zevon among them), announced recently that it would issue royalty-free licenses to Webcasters. It's not forever, mind you -- the offer expires at the end of next July, and the label's quick to point out that it's not looking to set any long-term precedents. But Artemis CEO Danny Goldberg puts it this way: "The amount of money involved isn't significant to my artists or to us, but it is significant aggregately to these Internet radio stations. So I just wanted to make a gesture of support."

Don't misunderstand. This isn't about charity.

"Look," says Goldberg, articulating what ought to be (but isn't) conventional wisdom, "it's good when there's rock magazines, it's good when there's music television, it's good when there's radio. We're happy when Tower Records has a listening post where people can listen to our artists for free -- we pay for that. We're happy when [Los Angeles stations] KIIS-FM or KROQ plays one of our songs -- we spend a lot of energy trying to get them to do that. Internet radio is fundamentally, in this current time frame, in that category.

"Right now, Web radio is the equivalent of the little rock magazines in the 1960s, where the record company advertisements helped keep them going. And yet their existence helped build recording artists. I don't really see [enforcing copyrights and propping up struggling Webcasters] as two mutually exclusive things."

And that's it, really. The labels have every right to protect their copyrights, and they've done so with abandon over the past few years. But there's a difference between prerogative and imperative; just because they can charge royalties doesn't mean they should. As Goldberg puts it, "I support the [Library of Congress ruling]. I just think that it gives us the right to make this choice."

The Internet can and does help sell music. Fans already knew that. The RIAA, it seems, is slower to catch on.

"Internet radio has to be at least as effective as broadcast radio [at promoting sales]," says Kurt Hanson, publisher of Radio and Internet Newsletter. Sure, Hanson concedes, broadcast radio reaches far more listeners (for now, anyway). But which listeners are more valuable to the label? Hanson points to Web radio's relatively upscale audiences as well as the fact that most Web radio outlets list title and artist information onscreen while songs are playing, along with a link to online retailers like Amazon or CDnow. In other words, "on value per song played, it's clearly a more valuable thing for the labels to have.

"This should be a harbinger of what most labels ought to logically do," Hanson continues. "Hopefully it's the first of a series of such moves. And hopefully it'll happen soon, before too many more [Web radio] stations are forced [out of business]."

Yeah, hopefully.

Don't hold your breath.

 
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