Online music royalties tidbits

A couple of interesting items, as a bill to restructure online music royalties in the U.S. makes its way through Congress.

  At GigaOm, a piece discusses a blog post from cellist Zoe Keating, who posted

"The law only demands I be paid in money, which at this point in my career is not as valuable as information. I'd rather be paid in data," Keating says, referring to listener data that could be gleaned from online services, which she in turn could use to boost ticket and CD sales.

The current rate (about a tenth of a cent per play) means that only the most popular artists can count on substantive revenues from web plays.  For most artists, revenues come predominantly from touring and merchandise sales.  Ms. Keating notes that data on her fans can be much more helpful - she already uses basic postal code information from iTunes sales to help plan her tours.

Keating understands that in order to prosper in a world of digital music — just like in the world of e-commerce, digital publishing, you name it — information is power. 

 Meanwhile, a Billboard story addresses a recent report from an economist at Washington and Lee University.  He looked at what broadcasters would end up paying, if the proposed online royalty rates were applied to them.  His analysis is a bit seat-of-the-pants, relying on some rather simplistic assumptions to equate the "per play/stream" online rate to an estimate of songs played times aggregate radio audience (12+) (total songs per year x listening audience x royalty rate) - and comes up with a total of $2.47 billion.  The article tweaks the numbers a bit (adjusting for what it says is the 17% of radio programming that is non-music), but still reaches a total over $2 billion, which would be about 20% of total radio revenues.  The Billboard piece also notes another study by the same academic that suggested that if radio had to pay the same royalty rates for their broadcast signal as they do for their online stream, it would amount to $4.7 billion (or 37.8% of total revenues).
  A lot of the people advocating for raising online royalty rates argue that it's a matter of fairness.  I'll note that online music streamers are already paying royalties, both directly and/or indirectly (through licensing fees), so it isn't that online music streamers aren't "stealing" anything.  The bill's about increasing royalties and setting vastly different royalty rates depending on how the music is accessed or sent - and about making people pay extra to stream music they own from the cloud or their digital content lockers) for their personal use (but that's a different post).  The research being reported in Billboard shows that it's not as much about fairness as about privileging one music distribution system over another - and where's the fairness in that?

Source -  Data isn't just the new oil, it's the new money. Ask Zoe Keating,  GigaOm
Business Matters: If Big Radio Had Pandora's Royalty Rate, It Would Owe Billions,  Billboard.biz