Last week, you posted your questions to SomaFM's General Manger, Rusty, and today he delivers. In this interview: answers about CARP (which was wisely rejected by the Library of Congress, this week), the RIAA, the workings of an internet radio station, and of course, Big URL.
1) how much does the recording industry really care?
I was curious to know how much the recording industry cares about small stations. Do you think that the Recording Industry Association of America is going to come after these tiny internet broadcasters, some of which are run out of someone's bedroom, and actually try to enforce this legislation? Given the bandwidth small stations operate on, their lack of mainstream exposure, and the tiny bang for the (litigious) buck, it seems that the record industry can spend their resources elsewhere with greater effect.
I think the RIAA is very concerned with small broadcasters, and that they will go after them the same way they've gone after small web sites that post MP3 files. Just like the movie companies were sending cease and desist letters to all the fan sites out there.
Think about it, just in the last few months we've been hearing about how the RIAA's been suing companies who have MP3s on company fileservers.
If you can stay under the radar, more power to you. But once you start getting more than 50 concurrent listeners, you'll start getting their attention. Small stations have been getting letters from ASCAP and BMI for a long time, and the RIAA stands to gain much higher revenues than they do. With the proposed rates of 0.14 cents per song per listener, that works out to roughly $0.50 a day per concurrent listener, or $180 a year per concurrent listener. You can see that even a small station with 10 average concurrent listeners could owe them a decent amount of money each year.
I think they'll come after anyone listed in a popular listing directory, be that Shoutcast.com or the Icecast YP.
This whole CARP thing also seems more about control by the record companies rather than just pure monetary greed. The major labels only want to push their superstars. They're not interested in a diverse marketplace. CARP isn't just about money, it also includes some overly burdensome reporting requirements (including stupid things like each listeners time zone!). To me, it's pretty obvious that the major labels want to control what the public is listening to. That's why they're paying huge amounts in "legal payola" to the big broadcast chains. They don't want independent programmers fragmenting their potential audience.
And the way they'll enforce it is by going after the ISPs. The DMCA has some pretty clear methods for dealing with that. So it will be simple for the RIAA to use provisions of the DMCA to shut down the ones that aren't worth suing.
2) Thoughts about Digital Rights Management?
Given the availability of programs like streamripper (and others like it, I guess), do you have any plans to accomodate the myriad of digital rights management schemes in the pipeline? Which, if any, do you support or intend to implement? Do you think that you have an obligation to do so? BTW, keep up the good work. I can say with total sincerity that your stations have introduced me music that I would otherwise never have heard. I thank you, (and so does my iPod). ;)
The bottom line is that DRM doesn't work. It's like a speed bump, not a barrier. You can always use something like Total Recorder to record the bits going to the sound drivers. You can always plug a minidisc recorder into the audio outs on your computer. And you can always make a cassette off of the radio.
That being said we're not big fans of streamrippers. Bandwidth costs real money, and we have licensing fees (ASCAP/BMI) that are based on numbers of listeners and revenue. If someone is streamripping all day long, and they're not listening, they're costing us money. The latest versions of the Shoutcast server as well as the Shoutcast YP are not too friendly to streamrippers but again, that's just another speedbump.
Streamrippers do have their place for time-shifting, and taking a program with you in the car or on your iPod. But in those cases, you'd be ripping a continuous chunk of audio, not trying to split it up into discrete audio tracks. After all, we want people to listen to our full presentation. We may implement things to make it harder to split the tracks automatically.
As for an obligation to implement other forms of DRM, I guess I would have to see what that DRM was. And since our music is segued and we talk over the intros, when people do streamrip us they're not getting cleanly split versions of the tracks we're playing anyway!
3) Pirate Mythology
Right now Internet Radio enjoys a sort of "pirate" image, which I think endears it to many people because they feel like they're supporting independent media.
However, my guess is that as it grows and becomes more profitable, most Internet radio is bound to end up owned by 2-5 big players, as is the case with most other media. Do you expect internet radio to get bought up like the movie studios, local TV stations and radio stations, or do you think it will be able to stay independent?
Would mergers and consolidation ruin internet radio, or would it help it?
I'm not sure I agree with the "pirate" terminology, but I get your drift. We're independent, we're not mainstream, we're an alternative, we're indie, we're not part of the system.
I disagree that internet radio will be owned by several big players. Remember, net radio doesn't have the limitations that over the air broadcast stations do. There are a limited number of over the air stations in each city. This is because broadcast radio spectrum is limited (the FM band is twenty whole megahertz wide, the AM bandwidth is just over one megahertz wide!) However, the net is different, while not infinite there is a whole lot of room out there for content. There are over 3,000 stations listed in Shoutcast.com right now, and I'm sure there is an equal number of stations in other formats. There are less than 13,000 FCC licensed AM and FM stations in the United States. In all major metro markets, there is no more room for additional AM/FM stations. There is plenty of room for more stations in the 'net.
Will there be mergers and consolidation? Probably. Will this ruin it? Probably not. Here's how I see it: I think you'll see lots of stations join together into "groups". Maybe they'll be ad supported, and sell ads across the group. Maybe they'll be subscription based, and by subscribing to the group, you'll have access to all the member stations.
I'm sure a lot of stations will "sell out" to big media companies. And then their programming will get just as boring as the programming from the big media companies. Which in turn will mean that people who are tired of the same old shit will look for something different, the kind of programming only being played on the stations that didn't sell out.
I see it as a continual flow, a cycle almost. Would we sell out? Right now we are running purely on donations and donated bandwidth, so if someone offered us a way to keep running it like it is now with guaranteed bandwidth and actually pay me a salary, that would be great. There is also a lot of things we'd like to do to improve the quality of our streams but they'd all cost money. Same with our plans for additional channels. We've got plans for 6 more niche channels in the works but we can't afford to get them going at this time.
SomaFM could even go away tomorrow not due to CARP, but if everyone suddenly pulled their bandwidth. Donations aren't going to come close to covering the potential bandwidth bill of $12,000-20,000 a month. That really isn't control.
4) Cutting out RIAA music
Something that has been brought up a couple times in other threads, and that I am kind of curious about:
The CARP is something the RIAA is imposing, correct?
Does this or does this not mean that if an internet radio station were certain to only play music by non-RIAA artists, it could stay in business? It would not be terribly easy to find material for a net radio station that only played independent music, but it would be possible, i think, and at the least i'd listen to it.
But am i just confused? Would that be feasible from a royalties standpoint? What exactly is the royalties relationship between independent record labels and internet radio, before or after CARP?
One more small question: the page on CARP on your site says that non-US broadcasters would not be subject to the CARP fees. How would this work out? Would this just mean that anyone in Canada would be able to netcast worldwide without having to pay any fees other than the ones imposed by their government? Or would stations outside the U.S. be barred from netcasting to U.S. citizens? If stations outside the U.S. are allowed to run free, what would the regulations say about a server in the U.S. that is just repeating what is being broadcast by an internet streaming radio station located outside the U.S.-- so that the lag created by the internet links that go across the atlantic ocean are minimized. Could a repeater of this sort be classified as just another router, or would the repeater be subject to the CARP payments?
Thanks for clarifying things.. just curious. Hopefully, the LoC will see through this blatant attempt by the RIAA to silence internet radio and none of the above questions will ever become an issue. I wish you luck..
The CARP is the outcome of a provision of the DMCA known as the compulsory license. What that means, is that an internet broadcaster can get a license to broadcast any recorded works without getting prior permission from the copyright holder. The compulsory part means that the copyright owners must give it to you. In return the CARP set a royalty fee that would be paid to Sound Exchange, an unincorporated division of the RIAA. Sound Exchange is then obligated to distribute that money to the copyright owners and the performance artists, after keeping a cut for their efforts.
If a radio station was to get permission from the holder of the copyright of the sound recording - they could broadcast it without being subject to the DMCA compulsory license. It would not be easy to do this, and would require a lot of paperwork, but it could be done. The biggest issues that arise is what happens when the copyright is sold? This has happened with many electronica artists. They created the recording, they gave us permission to play it. But then they sold it to a record label who no longer gives us permission to play it. So the only way in that case we can play it is through the compulsory license.
This is what is hurting SomaFM the most. When we started back in 1999, we were playing unknown obscure ambient music. Labels would contact us after finding their tracks in the playlists and thank us for playing them. But as ambient electronica became more and more popular, big labels started buying the rights. Now those big labels won't even return our emails... and we're the people who did so much to expose and popularize their artists.
As for non-US broadcasters, the CARP fees don't apply to them, but similar, albeit substantially lesser, fees do. European stations have to pay a "Phonographic Performance License". My understanding is that this is a 3-6% of revenue fee. Stations outside the US won't run free, they'll just run at an affordable, reasonable rate.
As to the question of whether repeaters would be considered a "source of broadcast", we are not sure and it will probably take a court challenge to clarify it.
5) Royalties loophole?
by Dan Crash
The statutory royalty rate for Internet simulcasts of FM radio broadcasts is only half that of Internet-only broadcasts. So couldn't any web station cut their royalties in half by spending $34.95 (plus shipping) to buy a micro-FM transmitter?
Here's what the law says in Title 17, ? 114. Scope of exclusive rights in sound recordings:
The performance of a sound recording publicly by means of a digital audio transmission, other than as a part of an interactive service, is not an infringement of section 106(6) if the performance is part of ...a nonsubscription broadcast transmission.
It doesn't require you to be a licensed or noncommercial broadcaster, simply that your performance is broadcast freely over the airwaves.
Has the webcasting industry looked into this loophole at all? Seems to me that cutting your operating expenses roughly in half could be the difference between economic life and death for most companies.
You are correct that the compulsory rate for Internet simulcasts of FM radio broadcasts is only half that of Internet-only broadcasts. However, that is still a huge amount of money. For SomaFM, that would still amount to over $150,000 for the next year, or about 6-7 times our estimated revenues.
But buying a micro FM transmitter doesn't help. If you read further on, you'll note that Section 114 of Title 17 defines a "broadcast" transmission a transmission made by a terrestrial broadcast station licensed as such by the Federal Communications Commission.
Remember, in the US, you can't broadcast freely over the airwaves except in certain designated bands, and then only within certain limits.
6) Fraunhofer, and OGG Vorbis
What amount do you currently pay in MP3 liscensing, in order to stream SomaFM over the internet?
With all the threats and attacks to MP3 streaming by Fraunhofer, have you considered moving to streaming OGG Vorbis files?
As Winamp is now shipping with native support, this could be a good way of shaving down some of the fees regarding your business.
We are not paying licensing fees to Fraunhofer, although we do own a licensed copy of their encoder. We currently use LAME for all Mp3 streams.
We are intrigued with OGG Vorbis compression, and would like to start experimenting with it soon. We've been kind of kind of busy with all the politicking lately to spend time on technical experiments.
There are a few problems we face: all our music is currently stored as high bit rate MP3 files. (192-320kb). From what I've seen, OGG does not do a good job recompressing MP3 files. Our broadcast playback software plays back and segues music files, does some audio processing (automatic gain control and some light dynamics compression), sends the bit stream to the LAME encoder and then onto the server. This sounds pretty good even though in the end, the listener is getting a file that has been double MP3 compressed. But add OGG to that equation, and the recompression could sound pretty bad. We still have to experiment with this more. OGG is in our future. As storage gets cheaper, we'll re-encode our music in a non-lossy format.
And as soon as Tag and Tom ship a version of the Shoutcast DSP with OGG codec support that is stable, we'll start running an experimental stream.
7) Popular (internet) music on the Radio?
As much as I love internet radio and hope to see it stay I have been wondering why some of the more popular music themes on the internet are not available on commercial radio. I am talking about the sounds of SomaFM's Groove Salad, Digitally Imported and other internet radio stations playing Ambient, Trance or any of the other more mellow versions of Electronic House. What in your opinion is the reason we can't find these styles on commercial radio?
Best of luck and keep up the good work!
The audience isn't big enough to make it worthwhile to advertisers. The broadcast band isn't big enough to hold fringe formats. Formats succeed on internet radio because the audience is NOT limited to a geographical area. I think the place you'll see these formats first is satellite radio. We've talked a bit to XM, but they are still under the impression that electronic music = dance music. They don't realize how broad the genre is, and lumping them all together would be like mixing Dixieland jazz and blues and smooth jazz together on the same channel. XM is starting to come around and we've been told that they're actively considering some type of "Chill Out / Downtempo" channel.
8) Will CARP (crap) affect overseas operators?
by an Anonymous Coward
The beauty of the Internet is that no single government (or stupid government person) could stop an entire class of service - look at Internet gambling. That said, why not relocate to a co/lo service in India?
Or, better yet, just run amok of the law? Last I heard, the Library of Congress is a library, not an authorized body to create policy. Since they are attempting to do so, why not block them on the grounds that they are exceeding their charter, and therefore, acting against the constitution?
Also, the fact that internet based transmissions are treated differently than FM based transmissions is ridiculous. This is the foundation of the "separate but equal" crap that CARP is funnelling.
128k MP3 (and less) is not a perfect reproduction of sound, as the LoC contends. It is no more perfect than FM, and no less perfect. Both formats mangle stereo separation, both add audio artifacts, and both deduct from clarity and depth of the source's timbre. The only real difference is one is digital, and the other analog.
And both formats HELP drive record sales. The big difference to the RIAA is that they don't control the channels of distribution for MP3 servers. All SomaFM, or any other internet broadcaster needs is a music library, a fast connection to the net and powerful servers. In order to broadcast on the air, you need to give some slimy FCC official a kickback, and/or be owned by TimeWarnerAOL, Vivendi, or Viacom.
I can't help but see the future of the RIAA - all the offices burned to the ground and the leadership decapitated. This another one of those infuriating instances where their feeble attempts at limiting distribution channels so that everyone listens to the same, soulless crap that record producers are puking at us.
Why not set up in India? Well, I like living in San Francisco and can't afford to move to India (I have to have a day job to pay my bills, SomaFM loses money). So we'd have to "virtually" run out of India and control things from here. That's a pretty lose loophole and won't protect us. It sounds good in theory but when you dive into it you realize that we would still be a target for the RIAA. Unless we were buying the CDs here and mailing them over there to be digitized and loaded into playback systems over there, we would still be breaking copyright law. Not to mention we could never do any more live broadcasts from the US. So that option is out.
While the Library of Congress is only setting the royalty rate, they're not charged with enforcing the law. The law is set in place by the DMCA. And as I get older, it's scary enough for me when I get a letter from the IRS, let alone a knock on the door from the FBI.
If we were rich enough, and had enough money or a bunch of lawyer friends, we would form a LLC and challenge them. But just to give you an idea of what it would cost- the costs associated with being a part of the original CARP hearings came out to $300,000 per each participant. Yahoo and MTV can afford that, but we can't.
Keep in mind that CARP only sets the fees that are required by the DMCA. We can't change provisions of the DMCA by going after the Library of Congress, or complaining about CARP. We can only hope to get a fee basis from CARP that will not bankrupt internet stations.
9) Business Model
How does SomaFM compare fiscally to a traditional FM or AM business?
Specifically, are there any fiscal advantages to using an internet-only format to outweight the disadvanges (like a lack of big-name advertising)?
The fiscal advantages to being internet-only:
Massively lower startup costs. We were able to get started almost immediately. Even if we could have gotten a license and construction permit to build a new FM station, it would have taken a year with all the regulations you have to go through. Not to mention the ongoing regulations that over the air stations have to deal with (FCC licenses bring with them lots of FCC mandated record keeping and such).
Incremental costs increase as audience increases (bandwidth mostly). Can't reach people in cars, which are a huge potential audience. We don't get respect from record companies (e.g. we have to call and beg just to get copies of CDs, they rarely automatically send them to us), nor do we get the legalized payola known as indie promotion to play their music.
But to me, the most important thing is the global reach we get by being internet only. We can now get decent sized audiences for extremely niche music genres and formats.
10) Big Earl [spelled 'Big URL' actually] by hitchhacker
Hi Rusty, thanks for the beautiful music!
I wanted to know what you use for Big Earl's voice synthesis. It sounds awfully similar to Dr. Sbaitso from the early 90's.
Also, I noticed that there are many songs that have disapeared from Groove Salad's playlist from around last year. (GOOD songs). I wanted to know if this is because you were forced to remove them, and how many other artists/labels are being held back this way. This music is so good it gives me goose-bumps, and I can't stand the thought that there is more that I am missing.
my letter is off to my controllers^H^H^H^H^Hrepresentatives.
Big Url's voice is driven by an old bell labs text to speech demonstration site. He's the "Big Man" voice. Google for Bell Labs TTS and you'll find it. Sadly, the site crashes from time to time - I'm not sure but I get the feeling it's one old timer who keeps the site working. We're glad whoever keeps it up does, because we'd miss his voice otherwise.
The only songs that have disappeared are songs that we only had in MP2 format and have lost the original CDs for them. We try and re-encode them as we re-discover them. The reason for this is that the playback automation software we now use (from OtsJuke.com) only handles MP3 compression. But there were less than 50 songs that way. I don't think there are any others we are missing, we generally don't completely remove songs, we just play them a lot less frequently. In the last year, we've removed less than 20 songs from the playlist. There are probably close to 15,000 tracks that we play on the air.