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RIAA War With Webcasters Really a War on Indie Artists and Labels?

56% of the music they play, and some 70% of all the unique songs played were from independent artists and labels meaning they will soon lose an important means of reaching the masses.

Live365 Inc. recently completed a study of its 2006 Internet radio broadcasts which revealed that nearly 56% of its broadcast music comes from independent artists and labels and not major record labels. This statistic underscores how Internet radio helps promote new, emerging artists while also expanding musical diversity as the AM/FM radio industry consolidates station ownership and play formats.

The Live365 study further showed that well over 70% of all the unique songs played were from independent artists and labels versus the four major music labels.

In the ongoing war between the RIAA and internet radio webcasters over its so far successful bid to jack up the the royalty rates webcasters must pay for playing copyrighted content, a new study released by Live365 paints an interesting picture of what may really be going on.

The study shows that a mere 44% of music played by internet radio webcasters belongs to the major music labels while a majority 56% belongs to independent labels unaffiliated with the RIAA.

This is in stark contrast to the fact that a mere 13% of music played on terrestrial radio comes from independent music labels.

So why all the fuss from the RIAA?

The RIAA has successfully lobbied the Copyright Royalty Board to jack up the royalty rates RETROACTIVELY to January of 2006, in fact doubling the per-play rate by 2010, which is certain to close down a sizable number of small and medium-sized webcasters already struggling to make ends meet.

What this means is that the only real outlet available to hear independent music is cut off for a number of people and therefore makes it even harder for these independent, and usually struggling, artists to get their music heard and reach the masses.

If terrestrial radio is barely playing Indie music, and with these webcasters now being effectively shut down, it will almost certainly guarantee that already struggling music artists will be the big losers in all of this because many will no longer be able to hear and thus buy their albums. One could surmise that the RIAA is actually putting music artists out of work instead of trying to feed them.

Mark Lam, CEO of Live365 pointed out: “Only 10-13% of AM/FM music is from independent artists and labels so we spin FOUR times as much indie music as AM/FM. Our 10,000 DJ’s are opening up the diverse spectrum of musical genres and artists while AM/FM program formats narrow it. I see this statistic as a genuine reflection of what music DJ’s will play when the choice is driven by what people like rather than profits.”

Lam continues:

Clearly, Internet radio clears away a major hurdle for musicians to be heard. With the continued double-digit growth in Internet radio listenership, hopefully more and more songwriters and musicians will be able to use Internet radio to promote their creative works and generate income. That is what Internet radio is all about: bringing together artists and fans using a ubiquitous radio medium.

Now whether Live365 represents an actual slice of webcasters as a whole is unable to be determined but, considering the large number of webcasters it represents its findings can’t be taken for granted.

Moreover, once again the RIAA will have managed to kill off another important source of finding new music. First they killed record stores by allowing Wal-Mart and others to sell CDs as “loss leaders” at prices almost half of what music stores were abel to charge. Then rather than embrace digital music distribution back in 1999 with Napster, it fought it tooth and nail until it ran out of both teeth and nails. Lastly, it began a campaign to get every last nickel and dime in royalty fees it could find by sending letters to coffeehouses, barber shops, hair salons, and then by seeking to increase the royalties paid by both radio and web broadcasters.

Without a place to hear new music where does the RIAA expect them to go? With fewer terrestrial radio options thanks to corporate homogenization of radio playlists, and now the crackdown on indie-spinning webcsaters, where is the public to go to hear new artists and albums?

One word – P2P.

Who knew the RIAA could find new ways to muck things up for the music world but, by jove they have.