ADIOS, INTERNET RADIO

From: Mel Jones (rmelvin.jones@gte.net)
Date: Wed Apr 03 2002 - 08:41:11 CEST

  • Next message: Christina Long: "Christina's current music addictions"

    Hey just in case I thought I would pass along this info.

    Mel

    -- By Chris Gonsalves --

    I'm a fan of Stardog, personally. Maybe you like CelticGrove
    or BlueCityJazz. Doesn't matter. In a few weeks, listening
    to music on Internet radio will be dead as a mackerel.

    Shame really. The Internet radio business has been growing
    at something like 100 percent annually and is thriving in
    genres underrepresented on FM stations, such as classical,
    blues, jazz and gospel. Doesn't matter. The government,
    acting once again in the special interest of the music
    industry, is about to crush the idea.

    In the latest example of groundless regulation and greed
    interfering with free commerce, the U.S. Copyright Office is
    considering a proposal that would force Internet radio
    stations to pay exorbitant royalties to record companies and
    performers, something their over-the-air counterparts are
    not required to do.

    Where AM and FM radio stations pay a small fee to music
    composers, Internet radio stations are facing fees of up to
    14 cents per listener per song. That fee would bankrupt
    nearly all of the Web broadcasters operating today,
    according to the group saveinternetradio.org.

    Copyright officials have until May 21 to make the call, but
    considering that the recommended shakedown came from the
    advisory group they created--the Copyright Arbitration
    Royalty Panel (CARP for short)--it's clear the rubber stamp
    is warmed up and waiting.

    How did we get to this point? Even if you thought Napster
    and others of their ilk were the bad guys, how did Internet
    radio become to the target of the Harry Fox crowd? It began
    in October 1998, when Congress passed the "Digital
    Millennium Copyright Act" (DMCA), which gave record
    companies the green light to collect royalties when music
    was played via "digital media" such as Internet radio.

    It's an interesting departure from a music industry
    standpoint. Record companies and performers don't get
    royalties from AM and FM radio play because the copyright
    folks consider the promotional value of the airplay payment
    enough. So why the switch for the Internet? The theory
    bought by Congress is that Internet listeners can make
    "perfect copies" of the songs being streamed, and those
    copies could hurt CD sales. That would be a good argument,
    except that, as anyone who listens to Internet Radio knows,
    you can't make "perfect copies." You can't easily make
    copies at all. And if you can, they are of too low a sound
    quality to be useful in creating your own CDs. What you get
    sounds pretty much like those cassette tapes you used to
    make off the FM radio. Not great.

    Never ones to let facts stand in their way, the solons
    assigned to the CARP published their recommended royalty
    schedule in late February. As the basis for the outrageous
    fee schedule, the CARP report cites a $5 billion deal
    between Yahoo! and Broadcast.com. The result was a figure
    that would leave most Internet broadcasters, who have
    attracted precious little advertising, liable for between
    200 and 300 percent of their gross revenues. And, oh, by the
    way, the fees are retroactive to October 1998. According to
    Internet radio industry figures, a midsize independent
    Webcaster with an average audience of 1,000 would owe
    $525,600.

    See you later Stardog. It was nice knowing you.

    To e-mail eWEEK Deputy News Editor Chris Gonsalves,
    click here:
    mailto:chris_gonsalves@ziffdavis.com



    This archive was generated by hypermail 2b30 : Wed Apr 03 2002 - 09:16:57 CEST