[JPL] Anyone see the letter from Fred Wilhelms?

jazzrockworld rick at jazzrockworld.com
Wed Jun 20 12:51:30 EDT 2007

Did anyone read this?
Dear Mr. Bengloff,

I have noted that your organization has spoken vigorously in favor of the
Internet radio royalty rates set by the CRB and due to go into effect on
July 15, 2007.

A few things puzzle me about A2IM's position, and I am hoping that you can
clarify them for me.

Music from independent artists and labels make up 30% of what we get to hear
on Internet radio. This is substantially more than we hear on terrestrial
radio, where the great majority of music comes from the major labels of the
RIAA. Live365.com claims that 70% of the music heard on their client
stations comes from independent labels and artists. That's thousands of
stations, and tens of thousands of hours of webcasting independent music. 

Live365 has stated that without permanent relief from the CRB decision, they
will go off the air on July 15 because the only option is bankruptcy. There
are thousands of other stations that face the same choices, many of whom
feature music from labels that are members of your organization. 

Yet A2IM steadfastly supports the rate structure that will drive these
stations off the air.

My first questions are simple:

Who is going to pay your members their performance royalties if these
stations that play their music now are are gone? 

How are you going to make up for those stations going silent? 

How are your artists going to replace the promotional value of getting heard
on Internet radio?

If anyone should understand the value of a vigorous, varied and thriving
Internet broadcast environment, it ought to be A2IM. The more webcasters
there are, each paying a reasonable royalty, the better the chance the
independent artist is going to get paid, because there will be stations that
play those artists, and promote their live appearances, and sell their CDs.
Yet publicly, you're supporting a rate schedule that is going to eliminate
the very stations that play your artists. promote their gigs and sell their

And, to be completely frank, the settlement "offers" that SoundExchange has
made in recent press releases are nothing but window dressing. All they do
is postpone the problem while imposing limits on both revenue and listeners
that will spell immediate death for any webcaster popular enough to grow
beyond those limits. God help the webcaster who plays one of your artists
who begins to actually attract a following. God's got to help him because
SoundExchange and A2IM aren't going to, either under the CRB rate or the
current SoundExchange "settlement" offer. 

So that leads to my next simple question:

Do you think your label members would agree to a rule that if they sold "X"
number of CDs in a year they would be forced to pay retroactive membership
fees to the RIAA? 

The webcaster who goes one dollar over the revenue cap, or one listener over
the usage cap that SoundExchange has included in the press release "offer"
is facing an equivalent dilemma. I would have thought that A2IM, made up
largely of new and ambitious labels, would be acutely sensitive to arbitrary
limits to growth that punish success. 

I have read with interest your wholehearted embrace of the RIAA's campaign
to get terrestrial radio to pay performance royalties. I would like to see a
performance royalty in place as well. However, I've read on your own website
that you realize that A2IM is going to have to provide the "poster children"
for this campaign because no one can truly be sympathetic to a major label
artist asking for more money. Yet, independent artists and labels will share
in less than 10% of those royalties given the current terrestrial playlist
bias in favor of the major labels. 

And that brings us to my final question:

Why is your organization lending its name and numbers to a campaign that
gives your constituency so little and gives the RIAA so much?

In regard to these three issues, I really fail to see how your organization
deserves to put "independent" in its name, as you are following the RIAA
lead without much "independent" thought entering into it. To an interested
outsider, it certainly looks like you aren't very independent when it comes
to supporting things the RIAA wants. 

When I heard of the establishment of your organization (and I even attended
several discussions at SXSW about your plans on behalf of some small label
clients), I had hopes that you would truly bring a new viewpoint to the
conversations about the future of the music business. I think the time is
perfect for you to raise that truly independent voice. 

I look forward to your response.

Fred Wilhelms

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