RIAA trying to shoot itself in the foot, again

I really can't say it any better than this article from pcworld.com:

Internet Radio on Life Support Again

The Copyright Review Board dealt a serious blow to Internet Radio today, when it denied a request to reconsider its March ruling that would greatly increase fees broadcasters pay to copyright holders. The original ruling called for a serious escalation of fees, to the point where most small, medium, and even large Internet radio broadcasters would not be able to afford to continue broadcasting.

Most Internet radio experts I talked to back in March believed that this initial ruling was just a starting point--that sure, the CRB had basically adopted a fee structure proposed by SoundExchange (a.k.a. the people who would be collecting the fees), and that while that was unfortunate, things would work themselves out in the appeal process. This wasn't the first time Internet Radio had been declared dead, and this type of "negotiation" was just part of the process.

Maybe not, though. Today's decision means that process will take a lot longer, if it happens at all. According to the Radio and Internet Newsletter, the final decision must be published in the Federal Register within 60 days, at which point it can be appealed to the U.S. Court of Appeals in D.C.

And here's one of the fun parts: The new royalty rate applies retroactively to 2006 broadcasts. Any stations that can't cover the new rate are already in the hole, and assuming that a similar rate eventually holds up, the longer they continue to broadcast, the deeper the hole gets. Yeah. Not good times.

While broadcasters form groups like SaveNetRadio and the appeal process gets under way, I'm left with more questions than answers. Internet radio and sites like Pandora and Last.fm have become popular, useful tools for finding new music. So why are SoundExchange and the RIAA pushing for a structure that would shut them down?

Net radio stations are barely solvent as it is, so I can't imagine how this would be a negotiating tactic to get more money out of them. Seriously, what's the endgame here? Are they trying to force broadcasters to band together and negotiate their own license agreements in groups? Is that added degree of control actually worth the effort?

And apparently Last.fm broadcasts out of England, so this decision doesn't effect them. So maybe net radio stations will all move offshore. But what determines where a broadcast occurs? If songs get Akamized to servers in the States, does that count?

Honestly, though, it's almost pointless to try answering these questions. Any deduction you can do begins by assuming the music industry is acting rationally, and that hasn't held true since it figured out that people could rip CDs.

Sigh. You're not helping yourselves, RIAA. Get some consultants who know what the f*** they're talking about and stop harassing and alienating your own consumers. Start embracing technology instead. What harm does internet radio do? Oh my god, could people actually rip the songs from the streams? Cuz, like, that totally couldn't happen when I was 12, listening to FM radio on my stereo and waiting for my favorite song to start so I could hit 'record' on the cassette player. Double sigh. God forbid we actually introduce people to new music that they like and that they will then go out and buy. God forbid we practice a useful business strategy to save our flagging sales. God forbid, indeed.