Tuesday, April 24, 2007

I'm a HUGE fan of internet radio. It's allowed me to hear more and varied artists than I'd ever hear on any other radio, be it terrestrial or satellite. There is simply no other medium like it, in my estimation, for experiencing the vast wealth of music that awaits us.

Having said that, there's a movement afoot by Copyright Royalty Board to increase webcasters' royalty rates between 300 and 1200 percent over the next 5 years! Quite simply, this will most likely kill off most - if not all - internet radio stations, since the financial burden will drive them off the air. There are many reasons for the Board's actions, but here's what the folks at www.savenetradio.org say:

"At the request of the Recording Industry Association of America, the CRB ignored the fact that Internet radio royalties were already double what satellite radio pays, and multiplied the royalties even further. The 2005 royalty rate was 7/100 of a penny per song streamed; the 2010 rate will be 19/100 of a penny per song streamed. And for small webcasters that were able to calculate royalties as a percentage of revenue in 2005 – that option was quashed by the CRB, so small webcasters’ royalties will grow exponentially!

Before this ruling was handed down, the vast majority of webcasters were barely making ends meet as Internet radio advertising revenue is just beginning to develop. Without a doubt most Internet radio services will go bankrupt and cease webcasting if this royalty rate is not reversed by the Congress, and webcasters’ demise will mean a great loss of creative and diverse radio. Surviving webcasters will need sweetheart licenses that major record labels will be only too happy to offer, so long as the webcaster permits the major label to control the programming and playlist. Is that the Internet radio you care to hear?"

Suffice to say, this is a make-or-break time for webcasters, and a kind word on their behalf to your elected official(s) might go a long way to preserving this fantastic means of experiencing new music.


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