SoundExchange Claims Debunked By Net Radio Interests
June 6, 2008 at 10:56 AM (PT)
As expected, Internet Radio parties -- in this case, the editors of the RADIO & INTERNET NEWSLETTER (RAIN) -- took grave exception to SOUNDEXCHANGE head JOHN SIMSON's contention that the new higher royalty rates for Internet broadcasters hasn't priced Net broadcaster out of business (NET NEWS, 6/5). "Typical SOUNDEXCHANGE nonsense" is the general impression by writer PAUL MALONEY, who proceeded to take apart SIMSON's contentions point-by-point:
He described SIMSON's assertion of growth in Internet radio since the royalties went into effect as misleading because he "conveniently omits is that a significant segment of webcasters -- those most vulnerable to the steep royalty hike -- aren't yet paying the new rates ... So the notion that the webcasting industry is operating profitably under the new rates is simply false."
a significant segment of webcasters ... aren't yet paying the new rates ... So the notion that the webcasting industry is operating profitably under the new rates is simply false
After noting SOUNDEXCHANGE’s evidence of growth in webcasting as being forecasts and not actual revenue data, MALONEY asserted that "just because "business activity" is increasing doesn't mean anyone's making a profit -- "[No] more than record labels’ recent investments in online companies indicates that all is hunky dory with the record industry; or for that matter, the idea that 'increased business activity' in the home mortgage industry is a sign of that sector’s health!"
He concluded by describing SOUNDEXCHANGE's assertion that webcasters don't want to pay any royalties as a "straw man ... The webcasting industry solidly supports the Internet Radio Equality Act, which would have Internet radio paying royalties similar to cable and satellite radio, and still far higher than broadcasters. To imply that webcasters want to deny performers a royalty is untruthful and belies the untenable grounds of SOUNDEXCHANGE’s position."
Read the entire response here.