Rate of decay

Save Web radio!
By MIKE MILIARD  |  July 11, 2007


On June 26, Internet broadcasters across the country went mute. And with them went myriad voices of independent artists that have long been denied access to the predominately Clear Channel–owned gates of mainstream radio.

Was it a temporary inconvenience for the nearly 50 to 70 million Americans who listen to Internet radio every month, and the approximately 20 percent of 18-to-34-year-olds who listen each week? Of course. But more than that, the Web Radio Day of Silence was a way for Webcasters to protest a drastic increase in royalty rates and fees that could effectively kill off many Web radio stations. And if nothing is done, that silence may become permanent on July 15. So long, Pandora. Farewell, Radio Paradise. Adieu, Sky.fm. Unless, that is, we can beat the clock and turn back an ill-considered piece of legislation that will levy new rates on all Web broadcasters, effective between 2006 and 2010.

Back in March, the US Corporate Royalty Board (CRB) cooked up this scheme with SoundExchange, an RIAA-affiliated organization that collects digital royalties on behalf of copyright owners, and was, according to Jake Ward of SaveNetRadio.org, convinced “there was more money to be made out there.”

The CRB has now mandated that each public Internet station pay SoundExchange a minimum $500 fee for each channel it operates — in addition to an increase in royalty fees of about 300 percent — starting this Sunday. This despite the fact that Internet Radio already pays more than twice what satellite broadcasters pay.

For a company such as Live365.com, which streams thousands of channels, that could be ruinous. And Pandora, where the listener creates specially tailored channels from a vast library of available songs? Founder Tim Westergren writes in a letter to listeners that, “left unchanged, these new royalties will kill every Internet radio site, including [us].”

“More than a billion dollars is owed by the Webcasting industry to SoundExchange under the terms of the Corporate Royalty Board’s decision,” says Ward. “That’s pretty crippling.”

To put it mildly. But, Ward says, even at this late date, “hope is definitely not lost.” Specifically, he points to the Representative Jay Inslee’s (D-WA) Internet Radio Equality Act (HR 2060), which would nullify the CRB’s decision, instituting a revenue-based royalty rate rather than the CRB’s per-song model that is currently in place — and set to increase. With 125 co-sponsors, 2060 is currently pending in the House. And there’s a companion bill in the Senate.

Recognizing that “the wheels of Congress move pretty slowly,” SaveNetRadio has filed for an emergency stay in the DC Circuit Court of Appeals to push back that July 15 payment date indefinitely, until the legislation has run its course. Ward is confident the delay will be granted.

Here’s where you come in. Visit SaveNetRadio.org and click on the “Take Action” button. Call your Congressional representative and ask them to cosponsor the Internet Radio Equality Act.

Otherwise, you can expect a decimated Web-radio landscape: fewer stations playing fewer artists, fewer avenues for independent musicians to get their work exposed.

“The market becomes very similar to that of terrestrial radio,” says Ward, “where anywhere between 20 and 30 songs are played on a given FM playlist, and the diversity of online music that has been so valuable to artists across the country goes away.”

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