Music Business and Trend-Mongering

In my course (which starts on January 7th!) I have a lesson on radio. We go through the opportunities available to musicians at noncommercial radio (the stations that are not funded by advertising, typically located on the left side of the radio dial), commercial radio (those that are broadcasting for profit), and non-terrestrial radio (online and satellite). It’s likely no surprise to hear that the amount of money and resources it takes to get your music played on commercial radio during peak listening times makes it an unrealistic avenue for almost all independent artists and labels. I would argue that there are plenty of more effective outlets for the $250,000 you’ll need to spend on indie radio promoters, $50,000 on the necessary trade ads, and $50,000 on on-air ads that it takes to get considered for non-specialty show radio play on an active rock station in a major market. And even if you do have the money (and really feel that commercial radio is where you want to spend it) the stations have long lasting relationships with the major label promoters that they do not want to hurt, and it’s unlikely you’ll get much support anyway!

That being said, non-commercial radio (community stations, college stations, NPR stations) and some commercial radio (Triple A and Americana / some specialty shows) do have opportunities for independent musicians. But it’s still expensive – to really make national headway you’re going to need independent promoter help.

Which brings me to my point – not only is online radio inexpensive to target (in some cases as easy as downloading a submission form, as is the case with Pandora), but it brings excitement, variety, and most importantly, NEW MUSIC into a medium that has exposed the public to less and less new music for years (I am speaking primarily of commercial radio). Online radio is a medium that is continuing to gain momentum and listeners, which means, of course, that the labels are looking for their cut of the profits. In March, the United States Copyright Royalty Board announced new royalty rates for webcasts, effective to 2010. The CRB endorsed the proposal of the RIAA-associated Sound Exchange royalty organization, which represents the major and some indie labels. The new rates would force webcasters to pay for each song streamed to each user, and increase over the next few years as follows: (details from Wired magazine)

2007: $.0011 to stream one song to one listener
2008: $.0014
2009: $.0018
2010: $.0019

These rates would put the smaller Webcasters that do not have significant advertising revenue out of business. And last week, Bloomberg announced that Yahoo and AOL may abandon Web radio as well with the raise in rates (“We’re not going to stay in the business if cost is more than we make long term,” Ian Rogers, general manager at Yahoo’s music unit, said in an interview). The rate increase is not a done deal, however. Webcasters have launched an appeal of the rates, which begins in February.

I’m all for musicians being paid fairly and taking advantage of all revenue streams, but from a marketing standpoint, does it really make sense to impose rates on a developing outlet like this that will essentially kill all but the largest players? Check out more opinions here.