----- taken from eweek mailing.
"
ADIOS, INTERNET RADIO
-- 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."
"
ADIOS, INTERNET RADIO
-- 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."
