Mike Masnick points to this excellent post on Jon Healy’s blog at the Los Angeles Times. According to Live365, RIAA music accounts for less than half of all music webcast.
The problem is that, as Jamie Plummer explained in an issue of TechKnowledge a couple of months ago, every artist and every Internet radio station has to participate in the RIAA’s cartel collection agency, SoundExchange, whether they want to or not. As I understand it, artists are not permitted to sign separate contracts setting lower webcasting rates for their music, nor are artists allowed to give blanket permission to play their music for free.
This is a classic example of industry incumbents using the legal system to maintain artificially high prices. In a free market, lesser-known artists would offer webcasters discounts in the hopes of getting more play time. That, in turn, would put pressure on the majors’ royalty rates, as more webcasters shifted to playing less expensive music. But thankfully, Uncle Sam has stepped in and rescued them. Like the ICC of old, SoundExchange legally prohibits artists from charging unfairly low prices, ensuring that the labels don’t face unfair competition.
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