In the current fight over Internet Radio, it should come as no surprise that the fix is in and, like most things associated with the Recording Industry Association of America (RIAA), it’s the artists that are getting screwed. DJ ProFusion, a contributor to the political blog Daily Kos, noted last week that “the Internet radio game is rigged and the Recording Industry Association of America (RIAA) has rigged it in their favor.”

As reported by yours truly, both recently and back in March, when the Copyright Royalty Board (CRB) accepted the Sound Exchange proposal for royalty rates paid by Internet Radio broadcasters, they issued a ruling that would literally triple the dollar amount paid by stations like Pandora or Radio Paradise. Sound Exchange, a RIAA-created-and-funded collection agency, would be the folks to gather up this cash windfall on behalf of the RIAA-member labels.

When the CRB dropped the axe, some savvy webcasters thought that they could simply go around the board’s ridiculous ruling and play tunes by non-RIAA member labels and independent musicians, bypassing Sound Exchange entirely and paying the royalties directly to the people that deserve them. No way, Jose! The ass clowns over in the Sound Exchange legal department already thought of this dodge and, as part of the proposal they convinced the CRB to swallow, they were issued an exclusive, compulsory license that allows them to collect royalties for RIAA member and non-member artists alike.

What this shit means is that a) if you run an Internet Radio station, you are required by the Copyright Royalty Board to purchase a $500 annual license and pay Sound Exchange whatever royalty rate (per song, per user) is finally decided upon and; b) if you’re a musician, Sound Exchange will collect royalties on every “digital performance” of your songs whether you want them to or not. According to the Sound Exchange FAQ, if I read it correctly, you can license your material directly to a webcaster, but they’ll still collect your royalties for you. Sound Exchange will allegedly “sit” on these unpaid royalties until you join the organization and request your money, minus a small “membership fee” and other administrative costs. 

So lemme see if I got this right…you’re damned if you do and you’re damned if you don’t…if you get your music played by an Internet Radio station, you’ll earn royalties on that “digital performance,” which will then be collected by Sound Exchange. The only way that you can get your money is to join Sound Exchange and pay them for the right to collect your hard-earned royalties. Now I’m not a lawyer…not even a very good “man of the cloth,” to be honest…but it seems to me that there’s some violation of the law hereabouts, maybe something about taking away your right to profit from your work, interference with business, or something....

Personally, I would like to see a breakdown by Sound Exchange (a non-profit corporation) on the royalties paid to artists and labels by the organization for “digital performances.” I would also like to see the RIAA report on where all the money from download services like iTunes, Napster, etc goes. How much do the labels keep and how much does the artist get? Hell, I think that we all already know the answer to that question, and it ain’t pretty. Until such time as the netherworld freezes over and the major labels develop a conscience, here are a couple of fun links to pages on the Sound Exchange web site that should get you thinking about changing careers:

Sound Exchange "Our Philosophy"

Sound Exchange list of "unpaid labels"