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Web Radio: 48 Hours to Black Sunday

I must admit that I'm kind of anxious to know what's going to happen to my favorite Internet radio streams on Sunday. Yesterday, the D.C. Circuit Court of Appeals refused to halt an increase in royalty and broadcasting fees that are scheduled to take effect on Sunday. The buzz among small Webcasters is that the new fees basically will shut them down. That's unfortunate - because there are a lot of hard-to-find niches on mom-and-pop Internet radio stations that can't be found on the traditional dial. But this is not the reason behind my anxiety.

My concern is what happens at the traditional commercial radio stations, the ones that still broadcast over-the-air in their geographic markets. You see, traditional AM and FM stations are exempt from the new fees put in place by the Copyright Royalty Board, an arm of the Library of Congress. However, those same stations are now widely streaming over the Web - and those streams ARE subject to the new fees. For a guy like me, who moved from California to DC just a couple of years ago, listening to the Sunday night show on my favorite station from back home is a nice way to stay connected to the life I left behind.

I suspect that I have no reason to worry. My station is owned by media giant Clear Channel Communications, which likely has the money to pay the fees. Clear Channel spokeswoman Jena Longo says the company has made its opposition to the fees known to the appropriate people but couldn't comment on what might or might not happen to those Web streams on Sunday.

I guess I'll find out soon enough.

UPDATE: It appears that Sunday won't be so black after all for Internet radio stations. A new bill was introduced in Congress last night that would give parties 60 days to continue negotiations. According to an update in the Radio and Internet Newsletter, SoundExchange Executive Director John Simson says there's no reason for small Webcasters to stop streaming on Sunday.

By Sam Diaz  |  July 13, 2007; 1:32 PM ET  | Category:  Sam Diaz
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I'm bummed by this, I get a lot more choice via the Internet than available locally (2 stations). Will this have any affect on streams from stations outside the US? I do listen to several of those that I'd like to continue playing while online.

Posted by: Listening in Montana | July 13, 2007 2:20 PM

Another Big Conglomerate pushing there weight around while nobody gives a damn about the small operations.

I can not believe that these giant recording companys don't get it.

The more exposure they have for recording artists music, the more CDs, Music Videos and downloaded music there going to sell. DUH !!

Posted by: Kevin | July 13, 2007 2:49 PM

I am saddened by this. I listen to several different independent webcasts who will no doubt be impacted. I would hate to see them go. They are my connection to popular culture! This is going to impact the music industry in many negative ways. It will eventually come back to bite them.

Posted by: Sarah | July 13, 2007 2:49 PM

Our govt is getting crappier by the day.....

Posted by: Gav | July 13, 2007 2:50 PM

some good news on the topic

Posted by: Shane | July 13, 2007 2:59 PM

A suggestion: The solution to this situation, and that of file sharing, and also online music purchasing may be pretty simple. Using internet connectivity and a little discipline, we can all just get together and boycott music purchases, radio listening, and concert attendance until the powers that be realize that this is what greed will get them. Yahoo and a lot of big players are being penalized as much as the small internet radio sites by this nonsense---it shouldn't be too difficult to start an organized boycott. It will get a lot of public--and congressional--attention, and corporate profits will likely be hit pretty hard and quickly, enough to make them think out of the box for a change.

Posted by: jose | July 13, 2007 3:17 PM

I, for one, am pleased with the new rate hikes. Internet radio broadcasters have been freely rebroadcasting content, at the expense of the artist for too long. Please keep in mind that entertainment is not a free service, it is a business. The fringe artist and their record lables spend small fortunes to produce this content and they deserve to recoup their losses and attempt to gain a profit (I'm talking indepent label artist, not the big label big-shots).

Now, with that out of the way, there are many great artist out there who write their music as art to be shared and enjoyed. In this technical age, almost anyone with talent has the ability to produce their own albums. Internet radio is ideal format to break these unsigned artist and I think that they will begin to thrive in this new era.

The music industry is changing, albeit slowly, but it will change.

Posted by: dennis m. | July 13, 2007 3:57 PM

Dennis - keep in mind that you can't buy from artists you never heard of. Services like Pandora introduce you to new artists that I (I can't speak for others) then go and spend money on - because I do like supporting musicians for their work. And I'd much rather learn about good artists that way than be subjected to the latest "hit" every 20 minutes on commercial radio.

Posted by: Lia | July 13, 2007 5:01 PM

Royalty fee hike has been suspended and new rates will be worked out, was announced at congressional hearings over the issue, where if sound exchange didn't do something congress was surely going to... Current rates will be kept! This was announced yesterday I believe, it's pretty easy to keep current with this if you care about it, I do a google news search every once in a while with the search string "internet radio".

Posted by: Zin | July 13, 2007 5:34 PM

I don't see any reason that webcasters can't just get a foreign ISP and get around this that way. Wouldn't that work?

Posted by: Dennis Mroczyk | July 13, 2007 6:41 PM

dennis m., you forget that all artists -- even those who broadcast their OWN music on personal radio stations -- would be required to pay SoundExchange and the RIAA. How is this fair in any way?

Also, radio stations currently DO pay royalties - about 1/3rd what is being proposed (at the low end) - but the money rarely filters down to the artist. Remember than when the cost of doing business gets too high, the radio stations will shut down and consumers will decide that instead of lining the pockets of those who strongarmed their favorite station into shutting down, they will simply pirate the music.

New artists have no way of thriving in the era that soundexchange wants and that's their point. They would prefer if all artists were part of their RIAA manufactured club, because after all, they're driven solely by profits. We are going into a new era for music, but if the industry wants to survive they have to act in a manner consistent with what the customers want, not force the customer to act as they please.

Posted by: Karthik | July 13, 2007 10:29 PM

So the RIAA folks get to go from getting some money to getting none when they force the internet stations to close down. The stream of revenue killed by corporate greed can be added to the enormous drop in sales of cds. If the RIAA cabal continues to be so successful soon they won't have anything to litigate about.

Posted by: fat_hamster | July 13, 2007 10:31 PM

When the dust settles, I seriously doubt the new royalty fees will mean much in the way of additional revenue for artists. The mom 'n pop US-based web broadcasters will mostly fold their tents. The primary effect of this new fee structure will be to cede the web airwaves to foreign broadcasters, who by definition are not subject to US royalty law.

Posted by: Tem | July 13, 2007 11:56 PM

When the hell did the Gov't get the right to tell me what I can charge in royalties? If I create content and wish to give it away, that's my F****n business. This country is going down the crapper at light speed. You apathetic putz's that think socialism works. Let me come live for free in your home, eat your food, and dictate what I want from you becuase you owe it to me. Huh? I fear for my child's future in this soon to be North American Union. Wake up people! Soon the facsist's will be knocking on your door!

Posted by: No More BS | July 14, 2007 2:25 AM

When internet radio goes, so does my internet.
When I first got the internet it was fun.
Now it's super boring and not worth the money. The only reason I was hanging on to it was because I stream music while doing my work. Congress has to go. REVOLUTION!

Posted by: TL Myers | July 14, 2007 10:43 AM

To 'No More BS': I'll tell you why the government gets to set the royalty rates for the content you create: Because if everyone got to set their own rate, it would be total chaos. *NO* broadcaster would be able keep track of the royalties due. The result would be broadcasters couldn't use such content, hence no royalties collected, hence no royalty check coming your way.

I have some agreement with your pessimism with regard to the American experiment, but not for the reason you cite: It's because of community-challenged folks like you who think it's 'All about you.' Hellooo. It's not.

Posted by: Tem | July 14, 2007 2:53 PM

I think Congress got paid off big time by the RIAA. Why else would they not even bring this issue up on the floor of congress? I called and asked them to save internet radio, I had four friends call also. I am sure many more called, but were ignored because of-in my opinion- payoffs.

Posted by: Ron Colkitt | July 14, 2007 4:04 PM

I find this current situation infuriating. Here we have the means for truly independent media- some of it being done out of bedrooms with computers from Best Buy. Consumers get more (and more varied) choices, artists get exposure...

So of course here comes the RIAA and SoundExchange trying to shut it all down, in concert with this mysterious CRB (who are those people?). Look, I get corporate media and the RIAA trying to kill Internet radio. What I'm perplexed by is those musicians taking their side.

Unless musicians have bought into the wishful thinking that you can expand your media outlets (i.e. Internet radio) while keeping your royalty situation exactly the same, common sense would dictate that the current royalty payment schedule is more than fair in return for the potential exposure. BTW before Intenet radio there were no royalties paid by regular radio (so I've read in every article on this)- musicians seemed to make do with that for 70 years or so.

Posted by: PG | July 15, 2007 2:00 AM

I found more information on the Equality Act on They also have free internet radio there and a petition sign up. The net will suck without streaming radio! FIGHT THE POWER!

Posted by: Jimmy Woo | July 15, 2007 5:56 PM

We here at KBRP-LP Bisbee won't continue streaming unless we have a donor to pick up the fee. We operate on all volunteers and as a low power station we will be just that. Streaming did give us the possibility of much more. cheers hw

Posted by: harry | July 16, 2007 1:30 AM

i agree with the powers wanting some money for their music. Music would not mean much to a lot of talented artists if they did get some financial rewards for their energy. i believe that america as the music capital of the world will change significantly if music continue to be given freely away. a toast to the lawmakers

Posted by: chris | July 16, 2007 8:01 AM

One of the seemingly lost questions in all this, and in all of the Internet sales regulation and taxati0on debates, is how the Internet sales channels make and actual free market system possible, as opposed to the market oligarchy which we have used for so long. When the Internet lowers barriers to entry to where someone can go into the music production and distribution business from their own home using a machine a reasonable person could afford, then the basic premise of individual consumers having some market power equivalent to producers actually works. If I don't like the price, then I won't buy the product. If someone else produces something I like at a lower price, then I might buy from them. That puts downward pressure on prices, sort of how Adam Smith predicted. However, when all of the producers are compelled to participate in a fixed pricing system operated by a small number of controlling entities (shich in this case is apparently one entity), then you don't have a free market, but rather you have an oligarchy or a monopoly. And so to No More BS, when the government establishes and works in concert with a commercial monopoly to suppress free market participation by consumers and producers as a control on the market, this is not Socialism, this is more like Fascism. Let's call the connection between the RIAA and the CRB what it is, and stop branding anything which sucks as a Socialist plot.

Posted by: Gardog | July 16, 2007 11:54 AM

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