A podcaster, an artist and a legal expert discuss music podcasting’s future, and how government threats to Internet radio might impact their content.

The following are edited excerpts from a roundtable discussion with three people who bring different perspectives to the topic of music podcasting, but who all want to see it thrive, even as the US government, and the music industry enforcer, the RIAA, seek to tame the world of Internet Radio. We began by discussing the Copyright Royalty Board’s decision to substantially raise royalty rates paid by webcasters, generally understood to be those streaming music via the Internet. We also discussed a bill in Congress that could overturn the rate increase. Blogger & Podcaster editor-in-chief Shelly Brisbin conducted the interview. Editor’s Note: As we went to press, a deal to delay implementation of increased royalty rates for some webcasters had been struck. The deal is only a temporary reprieve, however.

Jason Evangelho runs Insomnia Radio (www.insomniaradio.net), a network of music podcasts. In addition to the long-running flagship show, Insomnia Radio, the network has expanded to more than 12 regional and international music podcasts based in San Diego, San Francisco, Los Angeles, Baltimore, New Zealand and Turkey. Insomnia Radio also produced reggae legend Mikey Dread’s Dread At The Controls podcast for the IR Network.

Colette Vogele practices intellectual property law, specializing in technology, new media and the arts. She heads Vogele & Associates (www.vogelelaw.com) where she represents numerous bloggers, podcasters, and businesses building Web 2.0 social networks. Vogele also holds a nonresidential fellowship at Stanford’s Center for Internet & Society (cyberlaw.stanford.edu) where she coauthored the Podcasting Legal Guide (2006). Her podcast, Rules for the Revolution, offers commentary on the legal questions faced by podcasters, video bloggers and others engaged in new-media innovations.

Chance (www.mynameischance.com) is a Los Angeles-based performer and songwriter who made his music available for use by podcasters early in the development of the medium, and receives significant play on a number of music podcasts. He has released three CDs and 16 singles since he began performing as a solo act in 2004. He performs with a backing band as Chance & the Choir.

With the recent decision to increase royalty rates very substantially on Internet radio stations, and the noises that the big-time music industry has made in terms of shutting down Internet-based distribution, I’m just wondering if all of you could discuss what this bodes for podcasters and people who like to consume music through the Internet?

Colette Vogele: There are a couple things going on right now with respect to the rates paid for streamed music. After a lengthy proceeding, the Copyright Royalty Board issued a ruling that increased the rates dramatically, especially for all webcasters. And the rate increase is anywhere from three times to 12 times what has been paid in the past. So that was sort of the shocker that came out a couple months ago.

After that, people on the side of the rate payers — the independent radio, Internet radio stations and then larger entities like Pandora and others that are part of the Digital Media Association had gotten together and started lobbying Congress to change [the ruling] because a legislative solution is one of the things that can change what the board has done. The legislative proposal would bring the rates into a more reasonable realm for this industry so that the industry can actually survive. At least that’s the position that parties on the rate-paying side are taking.

Chance: I hear radio stations complaining about the rates and I understand that, especially considering the fact that a lot of smaller stations like all the Live365’s would be knocked out of business. But are independent artists being taken care of when these rates get tripled or is it just the larger artists that are really the only ones being taken care of, which makes it a ruthless act in my opinion.

Colette Vogele: I think the people who are arguing in favor of the lower rates and having this bill be passed or some other resolution be achieved are not opposed to paying a royalty. They see that it makes sense and that artists need to be compensated and all of that. It’s very dramatic how this new rate affects whether they can be in business at all. And if they’re not in business, the new and independent artists are harmed.

Chance: And I completely agree with that.

Colette Vogele: There’s no place that they’re going to be played. I should say for disclosure I represent a college radio association and so I’m very familiar with it at that very early stage of people
getting their music played on college radio. It’s one of the best places where independent music gets introduced.

What is the status of the bill that is intended to remedy the situation?

Colette Vogele: House Bill (H.R.) 2060 proposes to lower the rates to a rate that’s slightly higher [than the current one]. The first part of the resolution is to throw out what the judges did in the Copyright Royalty Board. And the second part is setting an appropriate rate, both for commercial and for noncommercial. And then within noncommercial, they treat educational stations slightly differently. The proposed rates are higher than what satellite pays but it’s actually a very reasonable rate that they all agree they can do. That’s what’s going on on the House side. On the Senate side, another bill was introduced [that used] very similar, slightly tweaked [language]. And then the small webcasters were offered something from the RIAA or Sound Exchange that basically said “We will abide by the past situation.”

So up until recently, on the small webcasters’ side they were operating under a special settlement agreement because the same problem happened five or six years ago when the rates were first set. And basically I think the RIAA has offered to go forward under a similar regime as in the past for small webcasters. But to qualify as a small webcaster you have to be quite small.

Chance: How do they define what a small webcaster is?

Colette Vogele: Entities like Pandora are big webcasters under that definition. But the small webcasters would certainly include the Live365 people. It would include all of college radio. It may include the NPRs and religious broadcasters. I’m not sure, but I feel like it probably does.

Jason, let me get your sense of both the decision made by the Copyright Royalty Board and then the subsequent legislation, which may or may not fix it. What’s your take?

Jason Evangelho: Well, I’m a little bit hazy on the subsequent legislation to be honest. But I’m reading all kinds of different reports, like they consider a small webcaster to make under $1.25 million per year. Again, I don’t know the details on that. As far as the original [increase in rates], I’m confident that would put not only small webcasters but also [possibly] some podcasters out of business. What is the definition of a webcast? If I have a podcast that’s downloaded 30,000 times but 15,000 of those are streamed online, is that a webcast?

Colette Vogele: I don’t know the answer to that, honestly. There was a question about whether the download of a song or any kind of media is considered a reproduction or a performance of a song.

A court in New York recently opined quite definitively, although it’s a trial-level court so it would be nice to get that same opinion from an appellate court. But the opinion basically said it’s a reproduction, it’s not a performance. So if that download does not count as a performance, downloads are not at all affected by the webcasting act. The webcasting stuff has to do with streams. Now, it depends how you’re distributing the content in the podcast. If it’s streamed from your web site, it may fall within the requirements of paying the royalties for those streams, because a stream is basically a performance royalty for a “digital audio performance.”

Jason Evangelho: But the interesting thing is that about half of my audience streams the shows online.

Sounds as if you could be changing what you do.

Chance: Right. It’d be changing what you do. And if this were to affect that side of podcasting, then, wow, say goodbye to half your audience.

Well, as far as music itself, whether it be downloaded or streamed, Jason, obviously podcasters have to decide how they’re going to get the music, whether they use what is commonly called podsafe music or whether they acquire licenses. Can you talk about what you decided to do with Insomnia Radio and why?

Jason Evangelho: Well, we decided to essentially go with a formal license agreement where if an artist wants to get played on any of our shows, then they simply go to our little submission portal, fill out their basic information, agree to the terms and at that point then we can play them. And it’s loosely based around the Creative Commons license. We obviously don’t retain any rights to their music and we don’t have the right to sell their music, things like that. But we went through a long process banging out this license agreement and even though it was cumbersome we realized we just couldn’t legally accept an artist sending us an email saying, “Hey, it’s cool to play our stuff.”

But on the other side, that means that the artist has to read, understand and agree to your licensing agreement. Has that been a problem for them?

Jason Evangelho: I think we’ve had about 4,000 submissions since we introduced that and I’ve had about maybe five or six artists just flat out refuse to sign it. And honestly I think that’s a pretty low ratio. And that was probably just due to the fact that they didn’t understand it.

We thought long and hard about the terms because we wanted to enable artist submissions to be played on our podcasts or used in promotional-only compilation CDs or streamed on the Internet or released within a show in BitTorrent. So we get a lot of questions like, “Well it seems like you can just do anything you want with my music,” and that’s not the case. But honestly I’ve found that artists are receiving it pretty well so far. I think it gives the artist a lot more promotional room within our network.

Colette Vogele: And is it a nonexclusive?

Jason Evangelho: Oh, absolutely.

And you’re in the fortunate position of having people know your network and be eager to be submitted as opposed to a smaller podcaster who might be looking around for music and who might have fewer choices.

Jason Evangelho: I think in that case there’s still a lot of resources for them. There’s the Podsafe Music Network. There’s iodaPROMONET. I don’t think there’s any shortage of music to be played on podcasts

I want to ask Chance about his point of view as an artist in terms of making music available in a podsafe format. I assume you’ve signed Jason’s agreement because you get played on Insomnia Radio. But you’re also played on lots of other podcasts. So how do you approach which music you let podcasters play?

Chance: Well, it really depends. A lot of times I just send it. I mean some of the relationships I’ve forged with podcasters, believe it or not, have been very one-onone organic where they just find me somehow or another and say, “Can I please play your song?” And I go, “Sure.” And I give them a link. There is the Podsafe Music Network. I don’t put all of my stuff on there. And then there’s just the relationship that I have with Jason in particular where he and I go so far back that we’re sort of growing together with this whole Internet.

To follow up on that, does having all the exposure on podcasts lead directly or indirectly to either selling more tickets to shows or selling more music?

Chance: Oh, absolutely. Although we’ve been discussing a lot of legal [issues], I really enjoy the organic side of this. Podcasters came into being because they either (a) became disgusted with the current music scene — industry and the radio and everything else — or (b) they’re just music fans. I mean they just love music. And so what I’ve found is that it’s really gotten back to the dialogue of what makes music so wonderful.

A lot of people put quotes around the word “podsafe.” So I’m wondering just from any of you what your reaction to that term is; whether it’s one that you’re comfortable with and what it means to you in practice?

Jason Evangelho: Well, loaded question. I think that both podcast and podsafe are terrible words, honestly. After almost three years, I’m still fighting the battle that podcasts aren’t just for iPods. And as far as podsafe, I don’t know that anyone’s really defined what podsafe is. I mean the Podsafe Music Network would have you believe that all of the music that they have licensed for other podcasters is podsafe. But what does podsafe mean? Is podsafe just simply Chance gives me permission to play his music? Or is podsafe anybody in the world can play my music? I don’t like either term. Are musicians podsafe or are podcasters podsafe?

Colette Vogele: I think you’re totally right. But I would be very cautious. I think of podsafe as things that are precleared for various uses. I know that could still mean a lot of things. But it means that the artist has released a work to be used in certain ways and you have to get down on the Creative Commons licenses, you just have to get in and see what their restrictions are, if it’s commercial or noncommercial and if you can make mashups with it. But generally speaking I think that term only means that things have been precleared for certain uses.

Now, I wouldn’t associate podsafe with the artist. I would associate it with the work — with the actual song. Because [for] an artist I think it’s smart to test waters in different ways. Some of your stuff you can release in certain formats. Some things you do exclusively and other things you reserve all rights and you parcel out the rights differently. And I think that’s a really strategic way of seeing what value you can get for your work. So I think that we always need to consider whether something’s cleared or not on a workby- work basis, not by the artist.

What, other than these big dust-ups regarding copyright and royalty rates, may have some affect on podcasting? Is there anything going on in either the music industry or the podcasting world that music podcasters and artists need to be thinking about or watching for?

Jason Evangelho: I think that the biggest problem that podcasters are having is that they are giving themselves the title of being a podcaster and not a content producer.

Chance: Content producer is just not very romantic.

Jason Evangelho: Point taken. Can you imagine if Colette goes, “Oh my God. Chance is one of my favorite content owners of all time.” All right, I’ll give you that. It’s not very romantic. It doesn’t sound that exciting but the problem is podcasters have a hard time finding an audience for various reasons. Music podcasts, there’s thousands of them. Makes it even tougher to find your audience. But I think the podcasters need to get out of this box that they’re in, start putting out your shows on BitTorrent. I put out a few of our shows on BitTorrent six days ago and they’ve collectively had 6,000 downloads, which is staggering to me. No fanfare, no announcement. It’s just too limiting to call yourself a podcaster, I think. And I think that the majority of the world still just wants to go to a web site and listen to your content. I think that’s the bottom line.

Colette Vogele: Jason, do you think that Apple is hurting or helping on that front?

Jason Evangelho: I think they’re hurting podcasting for the noncommercial podcasters. When Apple endorsed and adopted the term podcast, it made it even harder to fight that battle that you don’t need an iPod or that you can just listen to it on your computer or you can burn it to a CD and then give it to a friend to listen to. And afterwards they slowly started shaping the podcast area of iTunes Music Store into something like your ESPN and your Showtime and your CBS. And what you see up there is about 90 percent commercial professional podcasts. And that’s not really helping the cause.

Chance: I don’t necessarily believe that the phrase podcasters is a bad thing. As a matter of fact, when I first discovered podcasting I found you guys to be very rebellious. So in a lot of ways it was very appealing to me because it was fighting the norm. It was fighting. What I believe is the problem with podcasting right now, believe it or not, is technology. I don’t think the technology is there to make it really simple for my mother to download a podcast just as easily as she can turn on the radio in the car. It’s funny that technology from 75 years ago still just reigns supreme here. But it’s a fact.

You guys are kind of saying the same thing. Jason’s saying he’s fighting the terminology war of “do I have to have an iPod” and you’re saying “I just want to hear the music and I want to get the content I want.”

Colette Vogele: From day one if we were good marketers we would have all found a better word.

Chance: Unfortunately I don’t think there’s any going back. I just think that podcasting is the word and it’s not going to be changed.

Jason Evangelho: I don’t agree with that because the next great thing could be the thing that fixes all of this. You’re just waiting for the time when everything loads up really nicely and everything is clean and accessible.

In order to be successful do you have to be accessed by millions and millions of people or do you simply have to make the technology such that millions of people can get it if they want it?

Jason Evangelho: Here’s how I’d measure success and I’ll use an analogy. Chris Penn from the Financial Aid Podcast actually blogged about this a month or two ago. He said suppose that you’re a Gulf Stream jet salesman, you sell these huge Gulf Stream jets. And to make a great living you only have to sell one of these suckers every two years. And you do a podcast about it and you’ve got 10,000 listeners but none of them is interested in buying a Gulf Stream jet. Now if you flip it around and you’ve got only five listeners but all five are interested, then that’s the measure of success. You have a dedicated audience that’s there for one reason. I don’t have a million listeners but every single one loves the music and they’re there for the music. It’s absolutely thrilling to be able to say that I was the first podcaster to play Chance and now two years later he’s on hundreds of shows.

Chance or Colette, do you have any general thoughts on that subject?

Colette Vogele: Well, I’m not a music-industry executive. I’m not an artist. I just have my little podcast. But I would like to just say from the legal standpoint in music licensing, something’s going to have to change. I mean the system is totally broken when it comes to Internet distribution of music. In terms of ability to share content and to make creative work and to do it while attributing the right people, paying the right artists and accomplishing all of the things that our copyright laws are hoping to accomplish, what we have now is a very broken system. And I, with all due respect to the major content owners, I think they’re doing what’s in their best business interest right now to try and control how this change occurs. And they’re really struggling because the Internet is a system that doesn’t necessarily want to be controlled.

Chance: I just read somewhere that the RIAA is actually trying to get these licensing fees out of terrestrial radio now, too.

Colette Vogele: Yeah, they are. They have tried that a number of times. [The justification] for terrestrial radio not having to pay the performance royalties is that they are a promotional avenue for music. The same argument could be made for [satellite and Internet radio]. So I think one of the interesting things — and I’d like to at some point, some day go back and research this — is that I think the reason we have the system we have with terrestrial radio not having to pay the royalty is because at the time radio was invented in the ’20s and over the many years leading up the early ’70s, radio became a very strong and powerful force. And in 1972 was the first time there was a federal right to protect a sound recording. Before that, you didn’t have copyright for sound recordings. You only had it for the underlying musical work. And so at that time, when they added sound recordings as a protected work, radio had a very strong lobby and was like, “Well, we can’t — we need an exemption.” And they got the exemption. And that exemption has lasted until today.

And the owners of those works have tried in the past to get that exemption repealed and have always lost. But now it’s a different landscape than it was ten years ago and I don’t know how that’s going to come out. But you can’t blame them for trying. They have a business interest and they — first of all, the record labels have a business interest. Their artists, if we want to think of the artists, are getting fair compensation from what the labels are doing and the deals they’ve struck, then the artists would be getting compensated as well. But I think it’s that radio is still a very strong lobby and I don’t think that’s going to [change] without a big fight.

It forces them to make this weird argument whether they make it directly or not that radio being less of a promotional medium than it was or less important as a promotional medium implies that there are other things that are more important. And so out of one side of their mouth they want to gain more money by eliminating the exemption for terrestrial radio. On the other side of their mouth they want to increase fees on Internet broadcasters or podcasters, or potentially podcasters, let’s just say broadcasters. So it’s…

Chance: Don’t you feel that there’s just a sense that there’s a third way, there’s another way to do this that’s probably just around the corner, we just haven’t quite figured it out yet? And maybe all this time that’s being spent getting the square peg of podcasting, [to fit the way people want to listen] maybe isn’t the right way to spend all of our time? That’s a question.

Colette Vogele: Yes.

Chance: Yeah, I think we’re almost there.

Colette Vogele: I think it’s fair to say that podcasting is a bridge technology to something that’s coming that hasn’t yet fully developed. And we’ll see. That’s what’s so exciting about this area.