Web Castes


The Library's Ruling
Last week, Librarian of Congress James Billington laid out the final decision on royalty fee rates that Internet radio stations must fork over to the recording industry. Although the rates were reduced to half the original proposed fee, Webcasters have still cued up a funeral dirge, and claim Internet radio has been dealt a deathblow.

Internet radio stations, regardless of size or profit, must now pay .07 cents per song, per listener, to record labels. The Webcasters, who have bitterly opposed the issue since it was first proposed in 1998 by the U.S. Copyright Office, say the reduced rate is still far too high, while the Recording Industry Association of America (RIAA) insists the fees are still too low.

Mere hours after the decision, Internet radio stations began to shut down - netrockradio.com has announced its demise, citing fees that were "specifically designed to shut down small webcasters" and "make it impossible for a non-profit station to survive."

The Digital Media Association, a trade organization for webcasters, says it will press Congress to overturn the decision and create an even lower fee. However, given the molasses-like pace of congressional legislation, such an appeal is not likely to happen any time soon, and Webcasters have all of 45 days to cough up the money they now owe retroactively from 1998.

And what will be the fate of IPM, the independent, non-profit Detroit-area station featured in this story?

"My reaction is....pensive," says the show's creator Bob Perye. "I don't play RIAA music, so I won't be paying RIAA fees, but I'm still concerned. I'm not convinced we've seen the end of this."

Perye is fiercely committed to keeping IPM up and running.

"IPM will be fine for the foreseeable future, knock on wood," he says. "There may be a need for lawyers and such, but I do not foresee RIAA fees putting me in the hole. I'll move the server to Canada before I buckle to those assholes."

- S.K.



Things are running a bit late at In Perpetual Motion.

The Internet radio program, dubbed IPM, is scheduled to begin at 8:30 p.m. sharp, but Red Wings fever has taken over. The show’s creator and director, 28-year-old Bob Perye, pads barefoot around his Madison Heights, Mich. living room, which has been converted into a broadcast studio.

Stationed between two computers, a mix table sits directly behind the television, where the crew of guest DJs is transfixed by the Red Wings’ Stanley Cup finals game against Carolina. Mic cables are draped over shabby chic couches and coffee tables, and the walls are plastered with autographed promo photos of independent artists who’ve been featured on the show. The DJs crack dirty jokes and debate the taste of a new blueberry-flavored malt beverage they are sampling, which is henceforth referred to as "the blueberry shit."

Perye -- aka "Director Mac" -- is counting down the seconds until the show goes live. He leans over to turn down the volume on the TV, and a roar of dissension erupts from the couches. He picks up his mic and mumbles "30 seconds" through a mouthful of tabbouleh.

"You are In Perpetual Motion," he announces over a dreamy track with swirling female vocals. The peanut gallery picks up mics and commences with the wisecracks, as Perye ticks off the artists to be featured on tonight’s show.

Like many Internet radio shows, IPM focuses on the niche market of independent and underground music. The format is a melting pot of electronica, industrial, synthpop, darkwave and gothabilly.

After the six-hour show is recorded, it goes up on the IPM Web site, www.ipmradio.com. Listeners -- about 2,000 per week, Perye estimates -- can download the show and play it anytime.

Suddenly expletives spew forth. DJ Saint has just spilled "the blueberry shit" all over his computer console, and the Wings nearly scored a goal.

Chaos ensues. It’s a typical night at IPM.

The show has a rotating staff of guest DJs, as well as voyeurs who just like to hang out while the shows are created. IPM isn’t like a traditional radio program; it’s more of a live party broadcast, with hour-long blocks of music interspersed with wacky commentary from the staff.

Perye, a networking contractor, has run IPM live from his home for almost four years. Recently, he and his band of merry misfits have felt the pressure of government proposals that would charge Webcasters royalty fees for each piece of music played.

The Royalty Shaft

The Webcasting controversy is complex, heavily debated and mired in acronyms. In October 1998, Congress passed the Digital Millennium Copyright Act (DMCA), which states that royalties must be paid to artists when their copyrighted material is played over the Internet or on satellite radio. Specifically, the fees would go to the Recording Industry Association of American (RIAA), which would then distribute them to artists and labels.

Traditional radio stations pay royalties to composers and music publishers, but not to performers. It’s always been assumed that those artists reap huge promotional benefits from radio play. Apparently, Congress decided that this concept doesn’t apply to Internet radio, even though Webcasts are capable of reaching a global audience. Hence, the creation of the DMCA.

Because the RIAA and Webcasters could not reach an agreement on royalty fees, Congress created the Copyright Arbitration Royalty Panel (CARP) to determine a reasonable rate. Webcasters hoped they would be charged only a small percentage of their total revenue, but in February, CARP proposed Webcasters pay a rate of one-fourteenth of a cent per song, per listener. The rate was slightly reduced for terrestrial radio stations that simulcast on the Web.

The royalties would be split 50/50 -- half to artists credited for songs, and half to the copyright holders (usually, the musicians’ label).

Webcasters were outraged and claimed the fees could shut them down completely. Although a fourteenth of a cent sounds paltry, it adds up quickly. Commercial Webcasters -- even those without many listeners -- could easily rack up $500 in fees over the course of a few hours.

The Internet radio community rallied in protest, creating Web sites such as www.saveinternetradio.org and encouraging listeners to write Congress.

Webcasters experienced a tentative victory on May 21 when the Library of Congress -- in whose hands the final decision rests -- rejected CARP’s proposal without explanation. The Library's final determination was announced June 21. [See sidebar. -Ed.]

A Costly Hobby

IPM is a nonprofit venture, a labor of love for Perye. He estimates there are anywhere from 1,000 to 2,000 independent radio stations like IPM across the nation.

It’s these "hobbyists" and smaller commercial Webcasters who will be hit hardest by the June 21 decision. For hobbyists, the potential ramifications of the final ruling range from something as mild as increased headaches due to draconian record-keeping requirements, to facing a shutdown of the station.

Internet radio heavyweights such as beethoven.com and live365.com use advertising to garner income; fees for college radio stations will most likely be paid by the schools; public radio stations such as Detroit’s WDET-FM 101.9 -- which simulcasts on the Web -- have cut a deal to get help from the Corporation for Public Broadcasting (CPB).

WDET-FM’s general manager, Caryn Mathes, said that because the station is a National Public Radio affiliate, any Webcast fees will be subsidized by CPB "for the foreseeable future."

However, no deal has been cut for the little guys, many of whom portray the RIAA as the big bad wolf. Small Webcasters complain that they were never represented in discussions with CARP, but were shut out in favor of the big, commercial Webcasters.

The RIAA contends this is not the case and has even hinted that it may reduce rates for independent Webcasters.

"We recognize and appreciate that noncommercial Webcasters are different," says RIAA spokesman Jonathan Lamy. "We would be happy to sit down and discuss with them the issue of royalty rates."

Perye doesn’t buy it.

"One of the things we see with the RIAA is a desire to absolutely control every aspect of the consumer’s experience, and extract money from that experience at every step of the way," he says. "The RIAA sees independent labels, musicians and media outlets like Internet radio as a threat to their overall market share."

Since the show’s humble beginnings in December 1998, Perye estimates he has sunk more than $12,000 into the show -- that includes everything from new mixers and equipment to Internet providers, domain names and electricity bills.

Although he could use those expenses as a tax write-off, Perye does not want to turn IPM into a business.

"I’m allergic to business," he says, as one of the DJs flings a Teletubby doll at his head. "I don’t want to make a profit. This is a hobby. This is fun."

Because IPM plays only underground music, Perye doesn’t think the RIAA will come knocking at his door anytime soon. He will still be affected by the June 21 decision, however, in the form of added time and expenses, and strict record-keeping requirements.

"I may have to hire a lawyer to go through all the paperwork, create documents and fend off the RIAA," he says.

The Artist’s Voice

The original intent of the royalty fees was to give artists their due compensation. But many independent musicians who can’t crack into the world of commercial radio feel it would be a tremendous disservice if the fees caused Internet radio shows such as IPM to go under.

Robin Wylie of Warren, Mich. is in the band China Doll, which is frequently featured on IPM. Tonight, Wylie is also guest DJing, and using his mic time to gleefully and unabashedly plug his band. When pressed for a choice between free promotional play on IPM and collecting per-play royalty fees, he quickly chooses the former.

"I would rather see the money [from the proposed royalty fees] go into Bob buying new equipment for the show," he says. "If there’s a radio station playing my music and making money, then, yeah, give me a cut. But if it’s something like this," he gestures to the fray of action behind the mix tables, "where they’re not making money and sometimes losing money, then, yeah, play it for free."

Robert Vandergriff of d:konstruct, another Detroit-based band that receives frequent attention from IPM, concurs.

"Internet radio stations have been tremendously helpful in promoting local and independent musicians around the world," says Vandergriff. "It’s free advertising, and advertising is expensive. The bigger you get, the more expensive advertising gets. But with stations like IPM, you can get your music out to a very large group of people. They hear it on IPM, they like it, and they buy it."

One major concern of musicians is that listeners will record songs as they are Webcast, and then won’t feel the need to go out and buy the music. But clean, crisp recordings of a Webcast are an impossibility.

"IPM’s sound quality is far below CD quality," says Perye. "The sound quality will be good enough to enjoy privately as part of a radio show, but it makes for a lousy bootleg. The end result is you get to preview the music, and then go out and buy it if you’re so inclined.

"Thirty or so years of people using cassette tape to record music off of their home stereos didn’t bankrupt the music industry. Doing the same thing with an Internet transmission isn’t going to bankrupt the recording industry either."

Perye, a bull-headed, dedicated and loyal music fan, says IPM exists to support, promote and further independent musicians.

"If I was making a profit by way of advertising or any other means, I would absolutely pay a fair license fee to the artists. I have no problem with that. But," he adds, "the fee must be realistic, and 100 percent of the fees must go to artists. Not the labels, not the RIAA, not the politicians, not the lawyers, not to charities -- all to the artists."

Perye adds that the majority of music that’s played on IPM is submitted by the artists themselves.

"They ask me to play their music and give them exposure around the world. I don’t charge them for the use of my equipment, my time or anything else. So, I think they’re getting a pretty fair deal. An album a year for an eternity of airplay -- or at least as long as IPM is broadcasting."

Perye doesn’t plan to throw in the towel anytime soon, despite the Library's decision.

"No matter what happens, IPM will still be around," says Perye.

"At least I hope so," he adds with a nervous laugh.

Sarah Klein is a Metro Times staff writer. E-mail her at sklein@metrotimes.com.

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