April 16, 2007 The Death of Web Radio?  Olga Kharif

On April 16, right in the midst of the NAB2007 broadcasters conference,
the Copyright Royalty Board upheld its earlier decision to impose higher
royalty rates on Web radio stations. The stations will have to cough up
these royalty payments  300% to 1,200% higher than the fees they are
used to paying -- retroactively. Unless Congress gets involved, that
will mean the death of many Web radio stations, whose revenues will fall
short of these royalty payments.

But larger companies not currently thought of as broadcasters will suffer
as well: Today, the CRB clarified that its decision applies not only to
Web-based radio stations, but also to any company broadcasting music
over cellular networks. That means that its decision can be applied
very broadly. In effect, the CRB has imposed high royalties, payable
to a company formed by music labels, on everyone from Mercora, which
allows users to download its radio-playing software onto smartphones
for listening to Webcasts via cellular, to music services powered by
wireless carriers themselves. Until now, these carriers have negotiated
for royalty rates with individual content owners directly. These business
arrangements have not been disclosed, but there is a chance that the
telcos payments will now increase.

Now that the CRB decision affects not just the little guys  Webcasters
but also some of the telecom worlds giants, that makes me more sure
than ever that Congress will have to get involved before the decision
goes into effect May 15. Remember, Congress got involved in figuring out
what fair and reasonable rates were the last time the royalty rates were
renegotiated. Now, there are enough small and large Webcasters out there
wireless and Web-based -- to claim legislators' attention. Already,
today, a number of broadcasters kicked off SaveNetRadio.org grassroots
campaign. I wouldnt be surprised if telcos join in this effort.

04:55 PM

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maybe web radio should just give up on the major labels. there is so
much good recorded music in the world that is not on a major label,
why should we continue to pander to the suits that push the garbage that
they do? the time of the big record company is over and they just don't
get it. stop being an end-cap shopper. look around you. there is plenty
of good art happening all around you that you could support.

oh, i almost forgot, most of you think of artists as some sort of servant
rather than a worker who persists in creating works through toil.

Posted by: mark at April 17, 2007 02:48 AM

The industry would have an easier time pulling the wool over people's eyes
if they didn't get greedy with stipulations like retroactive royalties.

Posted by: emceay at April 17, 2007 02:55 AM

Leave it to these people to legislate something to death. Why do they
feel the need to kill something in the name of preservation? Answer:
greed. I don't listen to internet radio much, and it appears I'll be
listening even less. Thanks a lot, fellas...

Posted by: morris at April 17, 2007 08:18 AM

I definitely agree with the comment about ditching the major
labels. However, I will point out that the major labels are peforming a
service that I don't see being done elsewhere - the small labels don't
appear to turn anyone down due to their work not yet being good enough,
and the fully independant have no review whatsoever.

I grant that the major labels aren't flawless - probably over 90% of
what they pass fairs very poorly on the market. However, writing music
takes a lot of skill and practice - my first attempt at composing was
so horrid that I never made a second. I have heard independants that
sounded almost as bad as that first attempt. The good ones *are* out
there - but there's so many bad ones, it's tough to find the good ones.

I personally think it would be awesome if a group of people would get
together in an organized manner and produce lists of what they think the
good stuff is. Note that I'm not talking about people simply publishing
their playlists - showing the world everything at least one member of
the group likes. I'm talking about something a bit more selective -
listing only those things that a majority of the group likes.

There could be an organization out there which is doing that already -
but I haven't seen it.

Posted by: Ed at April 17, 2007 09:53 AM

Re: Listening to small-time artists.

There isn't that choice, for the collection authority is involved by
default. Only acts that have explicitally given permission, or arranged
a deal with that particular station will be playable.

There is some good free stuff out there (check out
http://irate.sourceforge.net/), but really the best stuff is small-label
mainstream. Ie. bands who have professional marketting.

Even if bands, promoters, and stations are all willing to cut a better
deal, the transaction costs involved (in time and effort, as well as
cash) means that it simply won't happen to a sufficient extent as to
create a music scene.

Now the best you'll have is online small labels, scatted across the
net. Afficionados only.

Posted by: Tim Wesson at April 17, 2007 10:08 AM

I used to find out about new music to buy, when I heard it on the
radio. Then over the years radio stations started playing only music
from tiny lists. My Wife asked me a few years ago why we never hear the
music we buy and play at home, on the radio. I shifted to Internet radio
because that was the only place I could hear much of the music produced
today. Now they want to kill that. I am very puzzled. If I was a musician
I would be very angry as now few will hear what I play. This makes no
sense to me. Who are they protecting? I won't buy it if I don't know it
exists, and killing Internet radio will go a long ways toward keeping
most music a secret. Perhaps Global Warming has affected their brains?

Posted by: Steve Hawkins at April 17, 2007 11:02 AM