Wednesday, May 2, 2007

Kiss Internet Radio Goodbye

I want to once again urge all of you to contact your representatives about the recent actions of the Copyright Royalty Board, which will effectively KILL Internet radio. This is no exaggeration.

From a recent article on Alternet with Tim Westergren of

Westergren: As a webcaster, we pay a performance royalty for every song that we stream. It’s a royalty that’s not paid by terrestrial broadcasters, and is paid at a much lower rate by satellite broadcasters. Until this ruling, the rate that we paid was 1.17 cents per listener-hour, which equates to about 0.076 cents per song streamed to each listener.

The new rates, which are retroactive to the beginning of 2006, are immediately higher than that. They go from 0.076 to 0.08 cents per song, and then they go up incrementally over the subsequent five years. And by the end, they’re at 0.19 cents per song. That’s close to a tripling.

Economically, these new rates will represent 70-80 percent of gross revenues for folks like us, as opposed to only about 25 percent today. So they make the business completely uneconomic. There’s nobody that can deliver an advertising-supported webcast at those levels, because advertisers won’t allow us to raise rates high enough to cover it.

When you consider that satellite radio providers pay between 5 and 7.5 percent of gross revenues for the same thing, it seems especially unreasonable.

Sinnreich: As of May 15, you’re going to owe higher royalties retroactively to January 2006, due in one lump sum. How big is that check going to be?

Westergren: I can’t tell you specifically, but the near-term impact is many millions of dollars.

This isn't some whiny liberal media scholar bullshit I'm handing you here, folks. These rates have passed, and go into effect on May 15.

So if you have any interest in listening to Internet radio after next tuesday, seriously - get off of your ass and urge your legislators via email, phone calls, letters, whatever - URGE them to pass the Internet Radio Equality Act drafted by Reps. Jay Inslee (D-Wash.) and Donald Manzullo (R-Ill.). The bill revokes the CRB's ruling, aiming to construct an alternate system wherein artists still receive royalties, but those fees aren't prohibitive for netcasters.

Even better, IT'S EASY. Free Press has it set up so you can send off a letter to your Representatives in literally seconds. If you have the time, you should write your own message about why this is important to you. But if you're in a rush, they have a nice form letter that you can paste.

Seriously folks - don't let this shit die. I'm sure there would be Internet pirates in the wake of this but the bulk of Internet radio will go away. This affects not just net-only stations like Pandora or Launchcast, but terrestrial stations with web simulcasts as well. Like listening to your local public radio station at work? Enjoy checking out college stations from other states? Your time is limited unless this bill passes.

Here's the form from Free Press:

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