I was completely unaware of the difficulties Internet radio faced until I saw a flood of posts on this topic here, here and here.

There appears to be a bitter struggle going on over the royalties and licensing fees that a court awarded to SoundExchange, which represents the big labels and performers to such an incredibly amount that it would force Internet Radio to completely shut down and go out of business for services that include Yahoo and Real Networks because backpay for a year of Internet Radio is a staggering US 1.15 billion and with further increases to come.

None of this news to me because the fight between traditional media and new media has been raging on for years and years and I first dismissed this as another such case, afterall, the independent artist can cut his own deal if he/she wants to be heard anyway.

Apparently not.

To quote from the above by Ocelopotamus:

By the way, just in case you think this is all about being fair to musicians and making sure they get their cut, here’s the most outrageous part of it all: the industry will be collecting money supposedly on behalf of musicians and bands they don’t actually represent, who will likely never see the money.

Though the RIAA only represents the Big Four, SoundExchange collects royalties on behalf of all copyright holders whether they claim them or not — which means it can take action even against webcasters who traffic exclusively in content from indie labels that would prefer to let things slide. To prevent such action a webcaster would have to negotiate exceptions with each label individually.

That’s right. To put this in simple English: If your friend’s band records a demo and your friend hands it to you with express permission to play it on your Internet radio station, SoundExchange will still demand a huge royalty payment on behalf of your friend’s band, even though your friend has never signed any kind of agreement with SoundExchange and will never see a cent of that money.

What this means is that this organization in the USA called SoundExchange can claim royalties on your behalf as an artist because it’s considered Radio without you ever knowing or caring about. A kind of Internet Radio Tax if you will but without the benefit truly going to the Artists.

The music industry has been at the center of many scandals and their controversial style of doing business has gotten a lot of attention, one might feel sorry for the kind of loss in business they have already suffered, but it’s the above sort of unfair and monopolistic behaviour that is doing them no favor.

This sounds almost too outrageous, do what you can to defend the survival of Internet radio!