Internet Radio In Danger of Extinction in United States

An anonymous reader passed us a link to a Forbes article discussing dire news for fans of Internet radio. Yesterday afternoon saw online broadcasters, everyone from giants like Clear Channel and National Public Radio to small-fry internet concerns, arguing their case before the Copyright Royalty Board (CRB). The CRB's March 2nd decision to increase the fees associated with online music broadcasting will have harsh repercussions for those who engage in the activity, the panel was told. "Under a previous arrangement, which expired at the end of 2005, broadcasters and online companies such as Yahoo Inc. and Time Warner Inc.'s AOL unit could pay royalties based on estimates of how many songs were played over a given period of time, or a 'tuning hour,' as opposed to counting every single song ... [They] also asked the judges to clarify a $500 annual fee per broadcasting channel, saying that with some online companies offering many thousands of listening options, counting each one as a separate channel could lead to huge fees for online broadcasters." There was also a previous provision for smaller companies that allowed them to pay less, something the March 2 decision did away with; in the view of the royalty holders, advertising more than pays for these fees, and they're ready for higher payments.

As the adage says, if you outlaw Internet Radio

[vivaoporto]

If you make hard for people that is willing to set up a legal Internet radio and make a profitable business of it, in the end, the only way to get internet music broadcast (and video, for all that matter) will be illegally, on P2P, FTP and whatnot.

But, on a second thought, that is exactly what the Media Cartel want. They don't matter where you are getting it, as long as the only way to be legally exposed to new content is through their channels. They couldn't care less if you and a couple of technologically wealthy people are going around their blockage, but they will do everything on their power to prevent both the average people and the *artists* to get in touch with each other without them.

This is not about giving people no options. It is about giving *artists* no option. People are attached to their favorite artists and will follow them wherever they go.

Some useful links...

[rly2000]

The DJ of my favorite internet radio stations, Radio Paradise [www.radioparadise], has a very informative blog [saveourinternetradio.com] concerning this issue.

Also, if you're interested in taking action, check out Save Net Radio [savenetradio.org].

Re:Well it had to happen sometime

[codegen]

You couldn't expect them to let people broadcast music for no fee forever

If you had bothered to read the article, or the previous article two weeks ago when the decision was announced (I know, I know, this is slashdot), you would have found out that previously they paid royalties similar to that of airwave broadcasting based on tuning hours. The move to per song/per listener is a considerable change in the fee formula that will drive many smaller broadcasters out of business. Its interesting that if I own a bar with non-live music (juke box/radio) I pay per listening hour regardless of how many patrons are in the bar that particular night, but if it is the internet, I have to pay per ear.

Re:Well it had to happen sometime

[tinkerghost]

They were paying a fee. They actually could pay 1 of 2 fees, either a % of profit or a per-song fee. The dropping of the % profit fee structure is going to put most of the small e-radio stations out of business. The increase in the per-song fee is going to put most of the others out of business too.

Re:Classic Radio

[Anonymous Coward]

At first glance one would think so wouldn't you. But such is not the case. The radio stations were given permission ( by paying the royalty ) to broadcast the music over the airwaves via radio, not stream the music over the internet. That is another method of distribution and the copyright holder maintains the right to determine how their content is distributed.

Re:Classic Radio

[Klaruz]

No, it does not apply to regular radio. In America, regular radio AND internet radio pay performance royalty fees to ASCAP/BMI based on a percentage of revenue formula. That fee goes to the songwriters.

For Internet radio ONLY, they ALSO have to pay a 'reproduction' fee, since internet radio is SOOOOO much different than regular radio according to congress. This fee goes to... you guessed it, directly to the RIAA, not the songwriters or artists. That's the fee they raised to obscene levels and what is threatening to kill internet radio.

Fair huh? No? Call your congressman.

Re:Well it had to happen sometime

[Klaruz]

The fees are based on audience already. They use marketing data to determine how many listeners listen to the FM station (advertisers care too, so if the station deflates figures they make less money from advertisers).

See my other comment, broadcast and internet radio pay the same ASCAP/BMI fees to the songwriters based on listener reach.

Internet radio ONLY (NOT terrestrial radio) has to pay a reproduction fee to the RIAA, because you sit at home all day recording songs off internet radio complete with cross-fades and announcer blurbs. They raised this 'reproduction' fee to very high levels and that's what will kill internet radio. What, you don't sit at home all day taping internet radio stations? Call congress and get this fixed.

Not a good thing...for music....or musicians.

[Anonymous Coward]

Music publishers stand to make the most money.

This rule change is not about paying artists more money. It is about controlling concentrating profit channels. Internet radio allows independent and niche genre music a place to be heard and promoted. If these rule changes go into effect internet radio stations will see a ten fold increase in fees paid to rights organizations.

A few Music Publishers hold the vast amount of rights to music. They want nothing else than all the available bandwidth for broadcast to be dominated by titles in their catalogs. So they seek to raise fees across the board with one purpose. To shutdown alternative channels of music delivery. They want the control and the money. All of it. This is the only way they see to do that.

SOMA FM Internet radio including my personal favorite Indie Pop Rocks (found iTunes radio tuner) is threatened with huge increases and will likely be forced to close. That would simply be a tragedy.

Being a independent musician myself I know all too well the lengths that the industry has gone to crush people from making music on their own. They export money from venues and threaten litigation to club owners if they don't pay and return to a "cover band" formats. Or simply do away with live music. Some give up and leave the hassle of live music behind.
Once again taking away channel of exposure. Granted there always will be musicians willing to starve and scrape by, but you can only do that for so long...the old phrase "don't quit your day job" was at one point almost going away, but they are working hard to make sure they make the decisions about who listens to what when.

Re:ditch corporate music

[evilviper]

time to ditch the music that RIAA owns, and only stream stuff that people want share.

The RIAA has very little to do with this. It's ASCAP who collect royalties.

Re:And What About No Advertising NPR?

[Critical Facilities]

There IS advertising on NPR. You know the little "bumper" at the end of each package that goes:

Support for NPR comes from the following...

There's usually some commission, retailer, foundation, company, etc whose business is essentially getting a "plug" and for which they're probably making a much larger donation than $120 per year. Don't get me wrong, I'm not saying I think that this ruling is a good idea, but in fairness, I can understand how they might be trying to lump NPR into the fold as well.

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[account_deleted]

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RIAA free radio?

[Jaywalk]

There is a lot of music out there which is not controlled by the RIAA. While it would mean skipping the "hottest new songs" (i.e., tuneless dreck) it would mean that the music could be streamed (or podcast) without any royalty payments at all. The 'casters could also make a side business selling their own music mixes with a percentage of sales going straight to the artists. And it direct competition to the RIAA hegemony.

Anybody see a reason why this wouldn't work?

Petition to save internet radio

[Zanix]

Here is a link to the petition to save internet radio. http://www.ipetitions.com/petition/saveinternetrad io/ [ipetitions.com] Please go sign it. The more people the better.

esp. if minimum payment

[Mateo_LeFou]

I, of course, didn't read all (115 pages of) the copyright board's actual statement from this month, but it seems like the $500 minimum-per-stream doesn't depend on whether the station uses ASCAP music or free (e.g. cc-licensed) music

"Radio Broadcasters propose that music-formatted stations pay a fee ranging from as little as $500 per annum for small stations in low revenue ranked markets to as much as $8,000 per annum for large stations in high revenue ranked markets"

The term "Creative Commons" is not grep'd in the document so I assume it didn't come up.

comments from a webcaster

[iamthelinuxguy]

I am a former radio dj. I always wanted to have my own radio station. My dreams came true a little over a year ago when I started my very own Internet radio station. I have spent around $4500 dollars getting the station up and going. There are costs for music, automation and music scheduling software, computers, bandwidth, stream hosting, licensing fees not to mention the endless hours I spent putting it all together. I also did all the webpage creation and hosting myself which saved me quite a bit of money. I had originally hoped that I would at least be able to re-coup my original investment and get enough revenue to at least cover my expenses. After a little over a year of broadcasting, I have received $0 in donations and just $20 from website advertising revenue (google and amazon). I finally resigned to the fact I was never going to see my $4500 again and since that most of that was sunk costs, I would just continue paying the ongoing licensing/streaming fees so that I could continue playing the music I love for myself and the small number of listeners that also enjoy the station. I never expected to get rich off this thing. I did it for my love of the music and my passion for radio. Now if this decision is not reversed I'll just be forced to throw all my hard work and dreams into the toilet. Some of us aren't the greedy bastards we're being made out to be. We just love music.

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[account_deleted]

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Re:RIAA free radio?

[rsmith-mac]

It's not about what music is related to the RIAA, it's about who has to pay SoundExchange either way, which is everyone unless they have a written contract from some entity granting them music. Ari at DI.fm made an interesting comment on the subject [www.di.fm], in short it won't work.

You may ask us about why don't we just play unlicensed tracks or make an agreement with artists directly to avoid paying so much. The reality of the business is that it is virtually impossible to micromanage things this way. You'd have to have a world class communication company to be able to track down so many artists or labels, find where who is, who to contact, what forms to sign, talk them into it, etc. Plus you'd be surprised just how much of the non-mainstream music you love so much here is really signed to a label. That's why in theory the law that allows for a blanket license is really convenient - it's just that the rates which were set now are truly hopeless and stifle any kind of competition. What are we supposed to do, wave a flag and and turn into a payola service? Put a banner out that says "hey, whoever pays us the most in advance gets to have his or her track heard on the radio!"? Because that's the only model that is going to work with these rates.