Monday, March 05, 2007

The End of Internet Radio? - Copyright Royalty Board is going nuts again

Bill Goldsmith from Radio Paradise my very favorite Internet Radio station
wrote about the latest attempts to put Internet Radio out of business
. The royalty payments set by the Copyright Roalty Board are flat out ridiculous. Pay per performance (ie. for every single listener) is a flawed model. Internet stations get penalized twice compared to over-the-air stations, they not only pay for the additional bandwidth consumed, but also pay more royalties the more successful they are. Just because you can exactly measure how many people actually listen on the Internet shouldn't give anyone a blank check to cash in on that, especially not the greedy music companies represented by the RIAA and SoundExchange.

Successful stations like Radio Paradise with 1000's of concurrent listeners easily make it above the low bar of 159,140 "aggregate tuning hours" per month in less than a day even though they are a non-profit radio station. The CRB seems to be under the impression that "non-profit" is code for "not successful".

The analysis on the same page is even more chilling. While Radio Paradise is listener-supported and, I happily pay a contribution regularly, many other Internet radio stations are not. The analysis suggests that an ad supported radio station would have to pay royalties roughly equal to 100% of their revenues.

While I agree with Bill's gloom assessment of the situation I certainly hope there is a way for Internet Radio to survive, and be it by a crutch similar to the agreement negotiated in 2002 mentioned in Bill's post. Meanwhile, Congress needs to get their act together and reign in this craziness.

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