SoundExchange: making up numbers
p2pnet.net news:- On June 26, net radio broadcasters across America launched a day of silence to protest increases in royalty rates.
“In the shadow of the Capitol, SaveNetRadio artists welcome Congressman Jay Inslee and Congressman Don Manzullo to speak to the crowd,” says the caption to the picture on the right, featured on the SaveNetRadio site, going on: “The Congressmen have introduced legislation in the House of Representatives that would save Internet Radio.”
Entertainment lawyer Fred Wilhelms is among the most vocal opponents of the increases, and he’s been uncovering the inconsistencies and outright lies emanating from the corporate music industry and its adherents >>>>>
Today’s lesson in imaginary arithmetic comes from Richard Ades, the latest in an apparently endless series of paid SoundExchange spokespeople (and you wondered why they need that $1 billion in administrative fees!)
In response to the Internet Radio Day of Silence, Ades was quoted by Technology Daily as saying “The bill on the Hill would not only vacate CRB decision but would cut rates by 75 percent from what the old rate was. That’s their idea to fairness to artists? That’s an insult,”
What is truly an insult is that SoundExchange’s mouthpieces continue to make up numbers as they go along and expect everyone not to check their work.
Let’s examine Mr Ade’s grasp of simple math.
The percentage-of-revenue royalty rate called for in H.R. 2060 is 7.5%.
If Mr Ades was right about that being a 75% cut from the old rate, the old rate would have to be . . .?
Anyone? Anyone? Bueller?
The answer is 30% 7.5% is one quarter of 30%. A seventy-five percent reduction from a 30% rate gives you a 7.5% rate. That was easy.
Except the old rate wasn’t 30%. It was 10.9%.
Mr Ades was only off by a mere 275%. I guess he should get credit for not repeating John Simson’s earlier howlers about Internet Radio having $500 million in advertising revenue, which missed reality by 1000%, Mr Ades was nearly four times closer, which almost puts him in the same time zone as the truth this time. That’s an encouraging sign, but I’m sure SoundExchange will do what it can to get the “margin of error” back to their usual higher comfort level as soon as possible.
Sarcasm aside, isn’t it past time for SoundExchange to stop making up numbers and actually respond to the questions being asked?
Isn’t it time they stop putting guys like Ades out in public to invent numbers and actually explain why they think they need $1 billion in administrative fees?
Making up numbers always worked for the RIAA, but they just worked for the major record labels, so no one really expected them to be honest.
SounExchange’s John Simson, Ades and company keep talking about the poor artists they represent. Isn’t it time to be honest with them and tell them that when the Internet stations those artists rely on disappear, so will their royalties, no matter how high the royalty rate is for the surviving stations?
SoundExchange’s disdain for the truth equals it’s disdain for public opinion, and both of those reflect the real disdain it demonstrates to the artists it supposedly champions. Hasn’t everyone had enough of that?
Or at least 75% of enough?
Fred Wilhelms – p2pnet
[Wilhelms is an entertainment attorney based in Nashville, Tennessee. You can contact him at fred.wilhelms @ gmail.com.]
Also See:
day of silence – Net radio’s day of silence, June 25, 2007
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June 28th, 2007 at 8:34 am
the problem is no one calls these guys to the carpet on their fuzzy math. It doesn’t take a rocket scientist with 5 minutes of research to figure out the guy is lying through his teeth.
of course big media will never call them on their numbers because that’s like calling your sister a whore. Even if she is, you pretend she isn’t because it’s your sister.
June 29th, 2007 at 4:38 am
“SounExchange’s John Simson, Ades and company keep talking about the poor artists they represent.”
Artists? Please stop the scam. SounExchange is no different than the performance rights organizations that license radio stations, who continually claim they represent songwriters when in fact they work for the music publishing industry that keeps all or almost all the money after it is processed in dark rooms, where nothing can be seen.
Please stop using artists and songwriters as gimmicks. And please, open the books.
June 29th, 2007 at 7:22 am
Sure, and they should publish last year’s royalties that were paid to each artist. Forget the record label income. It’s the artist that count and “are protected”, allegedly
Of course some unreal excuse, such as privacy, or confidentility, will be given. Wanna bet?
June 29th, 2007 at 8:52 am
OK, I’ll jump into this.
Fred Wilhelm’s been getting a lot of ink lately, dipping into various parts of the webcaster issue, which he no doubt enjoys. I think it’s interesting that Fred rarely (at least in posts I’ve seen) acknowledges that he’s got a very vested interest in trashing Soundexchange, since he’s interested in establishing a competitive society, and the CRB told him “no”.
Why is that, do you suppose?
Could it have something to do with the perception that Soundexchange *is* paying artists, and doing a very effective job? How do I know, you ask? Because I’m a Soundexchange board member. I don’t represent the RIAA – I hold the small independent seat on the board, which is one of 12 seats on an 18-seat board that belong to either independent labels or artists…NOT the RIAA. I have seen the checks (my background is in artist management, and a long history working pretty much exclusively with independent artists and labels), and I know what the disbursements are. I have been part of the discussions to outreach to artists directly, looking for ways to tie in to various society and industry databases to match data and get more addresses, and I have called/written many of them myself to sign them up. Has anyone else here?
As an independent board member, do I want to see webcasters go out of business? No, I don’t, I have many friends who are independent webcasters. Independent webcasters are a very important part of the promotional mix for independent artists and labels. However, without independent artists and labels, the music business is a pretty thin place. There is a balance to be achieved, and as has been widely reported in the press, Soundexchange has offered to extend previous rates to small webcasters, despite the fact that this means that rates will be consistent for 12 years. Why is this so under-reported?
It’s fine to bash Soundexchange all you want, but it seems to me that Fred is long on criticism, and short on suggestions, other than the labels – rights owners – should take less money, and so should the artists. First off – if Fred did *his* homework, he’d see that as recently as last week (in a panel I did with Kurt Hanson, Mike Huppe, David Oxenford, and others), it was made very clear that Soundexchange is not the one who “defined” the $1B administrative fee – Soundexchange has not come out and said they need $1B in administrative fees, this stance was “defined” by the “army” of paid mouthpieces on the webcaster side (and if you don’t believe that the NAB, one of the largest lobbies in America, is part of this process, I have a bridge to sell you).
At the CRB hearing, Soundexchange did propose a $500/channel minimum to address primarily small services that have 10-20 channels (under the theory that these services should be paying somewhat more than services with one channel)…this was UNCONTESTED by any of the webcaster groups (read the record!), but very quickly “defined” by certain webcasters as putting them out of business. Hmm. Yet it’s Soundexchange that is guilty, once again, despite the fact that they did not define what a channel is (nor did the CRB panel, for that matter).
A $1B administrative fee is a soundbyte created by elements of a large industry (not everyone – but some) with a big vested interest in getting fees paid to musicians and labels to the lowest amount possible. Just ask Last.FM, who just had a $280M payday, while paying under heavily subsidized Small Webcaster rates. Sound fair to you? Would it sound fair if it was your music?
As far as the various wild claims that Soundexchange a) doesn’t pay anyone, b) keeps all the money, c) is a shadow organization of the RIAA, d) eats its children for breakfast, come on folks. Seriously. First off, this organization pays 55% of income DIRECTLY to artists, not via the label where it might be recouped, etc. If you are an artist, and you have registered with a verified address, you receive money. THAT’S IT. Now you would probably receive quite a bit more money if many of the webcasters who are complaining loudest were actually filling out their webcasting forms and reporting their plays. Some do…many do not.
Soundexchange isn’t some rinky-dink business – it’s an accounting company, with extremely stringent reporting requirements to the federal government.
Should Soundexchange make its overall public payout information more easily accessible? You bet it should, and this is very much in process and you can hold me to that. Should it report on every single payment to every single artist? Of course not. Would you like it if you were an entertainment personality, and someone published your private payment information in a public fashion? I doubt it.
Soundexchange is made up of a lot of people who care, deeply, about creating a future revenue stream for both artists and labels in the face of seriously declining record sales, not just for the majors, but also for independents and individual artists. It is not in SX’s vested interest to shut down webcasting, and it’s certainly not in the vested interest of the artists and independents on the board to do so. Which is why negotiations are in process, at the behest of the Judicial Committee, to come up with a solution everyone can live with. Fred’s suggestions that an entire industry is going to shut down on the 15th July are not only unlikely, I believe they’re flat wrong. Small webcasters have been able to survive on rates up to now, and they’ve been offered the same rates through 2010 in order to develop better business models and let the advertising market catch up with them.
There’s a lot of jockeying for public opinion going on here. Hey, I’m all about being able to consume music in cool new ways – I’ve been doing new media for over ten years for various independent labels and artists – but it’s got to be a fair equation. The Inslee Bill is not a fair solution for artists and labels. Soundexchange is working to respond to the Judicial Committee and resolve the issues we all know in a fair manner. Be careful what you read.
Please feel free to ask any questions you like, I will do my best to answer them.
June 29th, 2007 at 8:58 pm
“I think it’s interesting that Fred rarely (at least in posts I’ve seen) acknowledges that he’s got a very vested interest in trashing Soundexchange, since he’s interested in establishing a competitive society, and the CRB told him “no”.”
The reason I rarely acknowledge a “very vested interest” is because I don’t have one, You’re a lying halfwit, Dick Huey.
More to follow on Monday. There’s just so much false, stupid and just downright silly silly about your post, it is going to take some time to build an appropriate response that addresses the high points.
June 30th, 2007 at 11:39 pm
Is there a question in there somewhere? I said in my post I’d be willing to respond to any questions posted.
I took you to task, so I’ll let the lying halfwit comment slide as you’ve never met me and you’re in no position to say that. If I’ve got my facts wrong, lay ‘em out Fred, I’m fair enough to admit I’m wrong if I really am. There are very strong opinions on both side of this issue, maybe sometimes too strong to really hear a discussion of middle common ground, although that’s what I’ve been pursuing on behalf of the board since this all began.
The tone of the comments regarding the webcaster/CRB/Soundexchange debate has gotten downright nasty. I don’t think it’s positive for any part of the music world, including consumers, webcasters, and Soundexchange. Artists, and labels, need allies in all three camps, and it’s incredibly unproductive to have these camps pitted against each other. A solution everyone can live with is clearly needed. So respond away, but let’s have a meaningful discussion and not waste more time throwing virtual mud at each other. I’ve spent time over the last couple months reading your blog, I think I’m generally familiar with your positions.
July 1st, 2007 at 4:37 am
“I hold the small independent seat on the board, which is one of 12 seats on an 18-seat board that belong to either independent labels or artists…NOT the RIAA.”
Ok, 6 seats in the board are of RIAA labels.
This is how it works in the so called songwriter and other artists organizations Iam familiar with. A few strong members from large corporations will control many artists weak members. When artists get into “boards” they are always weak member and there is a reason for this. Any artist that is too smart and honest is always excluded from decision making positions in the industry.
“I have seen the checks (my background is in artist management, and a long history working pretty much exclusively with independent artists and labels), and I know what the disbursements are. ”
Can you diret us to where the data is available on the net? Or is the distribution data hidden, as usual?
Other than that, your post is nothing more than PR for SoundExchange. Board members are not supposed to do that and remain objective. Once a Board member praises the execution of management publicly, the member has become useless in judging the performance of management. It has become useless. If management asked you to do it, to priase their work publicly, you fell into a trap.
July 1st, 2007 at 9:32 am
Fred – I am extremely sorry for the accusation I made in my original post on this forum that you are establishing a competitive society to Soundexchange. This is ENTIRELY a misunderstanding on my part…and entirely incorrect…I mixed up your name with another individual who IS pushing for a competitive society to Soundexchange. We’ve never met each other – my mistake. I should indeed have checked my facts before leveling that accusation.
I had it in my head that this was you, and for that, I am sorry.
I stand by the rest of what I wrote, and would be willing to engage you in dialogue about that, but that piece of what I wrote is completely erroneous (if I could correct the post, I would), and I can see why you thought I was spreading lies about you. That is not my way – I feel that I present a middle voice on the SX board, a voice that repeatedly pushes for what is best for independents…which includes a healthy internet radio industry.
Please accept my humble apologies.
Best wishes,
Dick Huey
July 1st, 2007 at 10:42 am
There is an extensive post that will be appearing tomorrow on p2pnet that responds to your initial post. It asks those questions that you say in your reply post that you couldn’t find.
In your “apology” post, you say you stand by your other comments. This must clearly include ones made to me personally. As far as I am concerned, that demonstrates the lack of any sincerity in this “apology,” which is cleary driven less by any remorse over making false statements than it is driven by a recognition you made a fool out of yourself by making them. This is all about repairing self-inflicted damage to your own reputation, and not really addressing the intent of the crap you directed at me.
Frankly, if Ron Gertz made the same arguments I did, your statements about him were still inappropriate and non-productive. In regard to the debate on Internet radio royalties, the questions being raised about SoundExchange are far more important than who makes them.
And making a plea to avoid mudslinging comes a little late, doesn’t it? Your clear intent to attempt to diminish the questions by personally disparaging the questioner makes it pretty clear what SoundExchange is willing to do to prevail; lie, dissemble and slander. Whether the comments came from Ron Gertz or me is really irrelevant.
You went there, Mr. Huey. You now apologize because you did it to me, not simply because you did it. That’s not going to work.
Your apology is not accepted. That bell cannot be unrung.
If you want to answer the questions I raise in tomorrow’s post, go ahead. You are going to have to do some research to give me honest answers. I suggest you do it before you post this time. It might avoid the need for more false apologies down the line.
July 1st, 2007 at 11:27 am
“Is there a question in there somewhere? I said in my post I’d be willing to respond to any questions posted.”
What part of “More to follow on Monday” eluded your comprehension?
“I took you to task, so I’ll let the lying halfwit comment slide as you’ve never met me and you’re in no position to say that.”
How freaking gracious of you, especially as it comes after you attempt to disparage my integrity by making up a motive for criticizing SoundExchange! What made you decide you were “in position” to do that?
You’re a hypocrite and a pompous ass, Mr. Huey. I know that even though we’ve never met.
Since I’ve never met you, it is safe to say you’ve never met me. Despite that, you claim that I have some “very vested interest” in some SoundExchange competitor, which is an outright lie. You say some incredibly stupid things in your post, which will be addressed Monday, so you’ve proven you’re a halfwit, and, with your own words, I will demonstrate why that is true on Monday.
Put the two together and you’re a lying halfwit.
The real difference between you and me is that I’ve got the goods to back up what I said, and you don’t.
Your post gives substantial proof that you are a lying halfwit. On the other hand, you have no proof I have a “very vested interest” in anything related to Internet radio because I don’t HAVE a “very vested interest.”
“If I’ve got my facts wrong, lay ‘em out Fred, I’m fair enough to admit I’m wrong if I really am.”
If you do say so yourself.
I’m not Ron Gertz, Mr. Huey. Ron Gertz’s first name is Ron. His last name is Gertz. My first name is Fred. My last name is Wilhelms. These are four helpful clues in telling us apart. There are a bunch of other ones, but if you write these four down and keep them nearby, you may find it helpful in avoiding looking like a fool about this in the future.
“There are very strong opinions on both side of this issue, maybe sometimes too strong to really hear a discussion of middle common ground, although that’s what I’ve been pursuing on behalf of the board since this all began.”
Yeah, your lies about me really address the “middle ground,” don’t they? An ad hominum attack is always the way to get a meaningful discussion started, right, Mr. Huey?
Frankly, even if I WAS Ron Gertz, your personal attack was uncalled for. If you would rather attack the person rather than deal with what he says, go ahead, but don’t try to bullshit anyone that you are really more interested in finding that “common ground” than you are in making a point that has nothing to do with the subject.
This, frankly, is very close to the core of what a number of people perceive as a real problem with SoundExchange. They say they are going to do something, and expect everyone to accept the statement of intent as evidence they’ve actually done something.
Issuing press releases about offers to small and non-commercial webcasters is not the same thing as sitting down with those webcasters and actually negotiating. Please don’t try to tell me that the grandstand play at Thursday’s hearing about the $2,500 cap on the per-channel administrative fee had actually been discussed with any webcaster group before the hearing, because if it had, the limitation on the cap for 2007 and 2008 would certainly have been mentioned in response to the revelation.
In the same sense, coming onto a forum like this and saying SoundExchange is doing a good job is really not the same thing as SoundExchange actually doing a good job.
“A solution everyone can live with is clearly needed. So respond away, but let’s have a meaningful discussion and not waste more time throwing virtual mud at each other.”
Yeah, you got your shots in, so its time to call a truce and get down to the real issues, right? You’ve already demonstrated where you want the tone of the discussion set.
“I’ve spent time over the last couple months reading your blog, I think I’m generally familiar with your positions.”
I doubt it.
I don’t have a blog, Mr. Huey. God knows what you think you’ve read. As far as I know, Ron Gertz doesn’t have a blog either, so maybe you are confusing the two of us with a third person who you think has a “very vested interest” in Internet radio.
So, you are lying about reading my blog, or you’re a halfwit for thinking you’ve read my non-existent blog. Either way, it’s just more proof of my immediate response to you.
You’re a lying halfwit, Mr. Huey. All we have to do is figure out which part applies to this particular statement.
More to follow on Monday. That means I’m writing more, Mr. Huey.