Internet Radio at Risk?

I just saw mention on the LaxPower forum that internet broadcasters could be in financial trouble due to per-song royalties that the federal government may be about to impose as part of the 1998 Digital Millenium Copyright Act. Apparently this might impact more than just music programming, since the stations (especially internet-only ones) could be bankrupted by the retroactive fees. Reference URL: [www.saveinternetradio.org]

Does anyone (perhaps an Anbinder) have more background on this?

Done. Messages to Sen. Schumer, Sen. Clinton and Rep. Velazquez.

I think this is getting a lot of play. Both senators have drop down lists of topics to sort the email that comes in, and although the closest I could get with Schumer was "internet broadband", Clinton has a topic specifically for "internet radio".

I didn't do any independent research (not even Snopes) before I shot off my letters, so I really hope that this is real.

It's real - I saw an article about it recently. I can'r remember where but it was something very legit like CNN, Newsweek, etc. And while we're on a political swing, you may want to check out [digitalconsumer.org]

-Fred

There was a lot of talk about this from the RPI station WRPI a couple of months ago. See the links at [www.wrpi.org] on the upper right. More recently, see the following article in the school newspaper: [poly.union.rpi.edu] .

This is for real. Just check out this link [www.wtka.com] . This is the Detroit station that used to carry Michigan sports. Click on "Listen Live" for their statement on the subject.

The stations which would be subject to the extremely high royalties are those which are Internet ONLY. So VBR and TKO and all of the other traditional broadcasters would actually win if the Internet only stations get hit with the excessively high royalty rate because the competition would be thinned out. TKO for example would have to pay royalties on songs but the Internet only rate is much higher and many of these "stations" are running with virtually no income.

All of this is complicated by the lack of useful audience measurement for the Internet stations. Advertising dollars are normally dependant on the number of listeners. How many listen to a given shoutcast show?

The rates according to this Washington Post sponsored article would be twice as high for an Internet only station.

[www.newsbytes.com]

And here is one from PC:

[www.pcmag.com]

A preliminary win for the good guys:

[www.nytimes.com]

I'm curious, what rates to commercial radio stations play for airwave play? Is it much higher/lower than proposed internet rates?

The amount is much lower than the 0.14 cents per song listed in the links that I posted above. The song writer receives most or all of the money. The new proposals included money for the singers and musicians. I am sorry that I don't remember the exact rates that I read for current broadcast radio and I have been unable to find a link to this info.

For a slighly long but great overview of these isssues, I highly recommend "Webcasting Legally" by Jamie Zawinski (jwz)

[www.dnalounge.com]

For those that don't know who jwz is, I guess the best way to describe him is as the prototypical SF dot-com antigeek geek. Jamie was Netscape employee #11 or some such, meaning that he now has plenty of money to play with.

You can read his somewhat amusing, highly self-indulgent bitching at:
[www.jwz.org]

Anyway, jwz eventually quit his job at netscape after the AOL/Netscape buyout and decided to open the DNALounge in SF. He also posts the trials and tribulations surrounding of opening and running nighclub in a running welog:
[www.dnalounge.com]

The supposed reason for the high rates (at least it was was the reason for regulating internet radio different from over-the-air) was the fear that people will use their computers to make perfect digital copies and not bother buying CDs. Apparently people didn't forsee at the time that the sound quality of streaming internet broadcasts would render that concern irrelevant.

John T. Whelan '91 wrote:

The supposed reason for the high rates (at least it was was the reason for regulating internet radio different from over-the-air) was the fear that people will use their computers to make perfect digital copies and not bother buying CDs. Apparently people didn't forsee at the time that the sound quality of streaming internet broadcasts would render that concern irrelevant.

Yeah. Thus, record labels are no longer worried about people using their computers to make perfect digital copies of music and not bother buying... Oh wait.