Radio News You Can't Use

Webcasting D-Day Approacheth
If you've had your ear to the web stream these past few months, you know that a serious threat to internet radio has cropped up. This March, the U.S. Copyright Royalty Board (CRB) and SoundExchange came up with an unfair new royalty scheme for webcasters. These new rates are so enormous that many webcasters large and small, commercial and non-commercial, would have to pay royalty sums that surpass their entire annual revenues. SoundExchange and the CRB do not seem to view this as problematic to the industry, and have yet to offer a reasonable compromise to webcasters (though they have offered many unreasonable PR-driven "concessions").

The new rates are set to go into effect on July 15, and unless NPR's request for a stay is honored by the U.S. Court of Appeals, many internet radio stations may go out of business very soon. In fact, thousands of stations participated in a national day of protest against the new webcasting rates by going silent on 6/26. This prompted 350,000 listeners to put in calls of concern to their congressional representatives. WFMU chose to boycott all RIAA-registered music that day, and I've explained our position on the matter here.

There are bills in both the House and Senate for the Internet Radio Equality Act, which set a revenue-based royalty rate instead of the per-song per-listener model favored by the CRB and SoundExchange. Although the House Committee on Small Business led a discussion about the new webcasting rates last week (you can view the entire hearing here), many Congresspeople did not appear interested in intervening. Nevertheless, it may come down to Congressional action and legislation if SoundExchange doesn't negotiate a rational rate scheme before July 15. WFMU is encouraging listeners to call or write to their representatives in support of the Internet Radio Equality Act. You can get more information at savenetradio.org or by reading this recent L.A. Times debate between a webcaster and a SoundExchange rep.

Other radio news headlines from the past month:

- Seattle talk radio host Mike Webb's death has been deemed murder.
- Clear Channel and the Society of Broadcast Engineers are aiding the student-run Virginia Tech radio station (WVUT) by replacing the college's aging transmitter.
- The FCC is seeking public comments concerning the possibility of a merger between XM and Sirius satellite radio companies.
- In other FCC news, the commission held another hearing on media ownership, this time in Portland, ME.
- An Irish radio station's novelty toaster oven malfunctioned, prompting an evacuation of the large office building they are housed in.

Comments

[pmx666]

The Man won't stop until all remaining spectra of broadcast communication have been fully privatized. It's potentially going to turn out quite a tragic situation for the little guys and the bigger little guys (NPR etc.) alike.

[Pedro]

Where'd they get the name SoundExchange anyway? Sounds like one of those shitty audio stores at the mall in the '70s that used to sell junky stereo systems. The current SoundExchange is probably run by the same assholes that used to work in those mall stores, trying to convince dopey teens to waste their bar mitzvah money on a crummy soundsystem.

[lee]

and all the letter writing and marching and chanting and bumperstickers, etc. , do nothing at all. the powerful have their agenda[s], and they will do their best to adhere to them. what next?

[Chris]

Just saw this news on Salon.com:
http://machinist.salon.com/blog/2007/07/13/internet_radio/index.html

2007.07.13 • 14:16 PDT
Web radio stations win a last-minute stay of execution

Wired's indispensable digital-music maven Eliot Van Buskirk reports some good breaking news: Internet radio stations will not shut down this Sunday.

Many Web radio outfits feared closure as their legal fight against staggering new music royalty rates met failure this week. On Thursday, the D.C. Circuit Court of Appeals refused to block the new rates, which are scheduled to go into effect Sunday. But as a result of public outcry -- which, in turn, sparked congressional outcry -- SoundExchange, the recording-industry group that collects royalties, has agreed not to immediately enforce the rates, pending negotiations with webcasters.

I just spoke to Tim Westergren, the founder of Pandora, the hugely popular Internet radio station that allows people to create personalized music channels. I asked Westergren if Pandora will shut down Sunday: "No, we won't," he said.

On Thursday, the House Commerce Committee, chaired by Rep. Edward Markey, a Massachusetts Democrat, convened an emergency round-table meeting between both sides in the royalty dispute. At the meeting, SoundExchange agreed to cap the $500-per-channel fee that had threatened to wipe out Pandora and other stations that let people tailor radio channels to their taste. Westergren says the cap "was a precursor to any kind of negotiation, because that fee was so absurd. It was like a billion dollars for us and other large webcasters put together every year." Now, stations like Pandora will pay $500 for each radio channel they send out, with a maximum of $50,000.

Besides the per-channel fee, Internet radio stations also face a new per-stream fee that applies retroactively to 2006, and rises each year until 2010. The new schedule charges webcasters $0.00076 per listener per song for 2006; $.0011 for 2007; $.0014 for 2008; and $.0018 and $.0019 for 2009 and 2010. The rates are far more onerous than those imposed on satellite systems -- which pay a share of their revenue -- and for traditional "terrestrial" AM and FM radio stations, which pay no performance royalties for the music they play. (The music industry, though, is trying to change that.)

The negotiations between SoundExchange and the webcasters now center on these rates -- and they're taking place, Westergren notes, "under the watchful eye of Congress." And that, he says, is the main news today. "The reason this deal is happening is because of congressional pressure, and congressional pressure is happening because of people calling in. Everybody needs to know that. A million people in the last three months have called Congress about this. And Congress has said, Look, if you don't solve this, we will. That's very explicit."