Friday, April 27, 2007

The Crisis Facing Internet Radio...

In March, the Copyright Royalty Board released the new royalty rates that internet radio stations will have to pay for the next five years. Nobody is claiming that internet broadcasters should not have to pay royalties, but rather opponents are merely calling for equal treatment on par with other broadcasters. As of now, the CRB has raised royalty rates by 150% on internet radio stations, while keeping rates steady for satellite, and continuing to charge NO royalties whatsoever to AM/FM stations.

Read this article describing in detail the crisis facing internet radio.

An example of what the new rates will mean to smaller webcasters... For SomaFM, in addition to the $2000 minimal annual fee, "royalties for 2006 will be increased retroactively from about $20,000 to about $600,000. That's more than 3 times what we made in 2006".

As a result, SomaFM and other existing small independent webcasters will be driven off the air, and future ones will be chilled from even attempting innovation. We as consumers (and music lovers) will miss out on the tremendous diversity of content that internet radio promises to deliver. The cause of this is the Recording Industry Association of America (RIAA) who has singled out internet radio, in contrast to satellite and AM/FM radio stations, for extinction.

So yesterday, a bipartisan bill, the Internet Radio Equality Act, was introduced in the House of Representatives which would a) ensure the royalties paid by internet broadcasters are on par with those paid by other services, like satellite radio, and b) change the rate-setting standard to one that applies to most other statutory licenses, including satellite radio, jukeboxes and sound recordings. Additionally, a coalition of net broadcasters has gotten together to form SaveNetRadio.org asking people to voice support.

This bill seems very fair. Again, nobody is claiming that internet broadcasters should not have to pay royalties, but rather they are merely calling for equal treatment on par with other broadcasters.

Of course, if the RIAA was as clever as your typical 8 year-old, it might see the logic in how if having FM radio stations play their music for free leads to promoting their artists, then internet radio would surely do the same. But then again, the RIAA's strategy has actually been to sue 8 year-olds for copyright infringement to the tune of thousands of dollars.

You decide what makes the most sense.
  

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