According to this article, Internet radio will soon be no more:
Basically, the once-affordable royalty payments have been legislated into “no way”, non-affordable payments. At least that’s what the small stations claim.
So is this an example of greed or a reasonable adaptation to a new technology (the Internet)? What’s in the future for stations and listeners?
As a regular listener to KCRW, one of the largest webcasters, I am very concerned by this development. As I understand it, the royalties are in no way proportionate to the amount of revenue the station receives through grants and subscriptions, but are strictly based on the number of listeners.
There’s some logic behind that. The more listeners a station has, the more advertising it can attract and at the best prices. Same with a magazine; the circulation is a major factor in determining the ad costs.
I guess I’m wondering why, with an explosion of stations thru the Internet, all of which pay SOME royalties, right? – why this hasn’t been enough up to now. Doesn’t it seem like Sound Exchange is killing off the goose that laid the golden egg?
It does seem perverse. Another odd thing is that Sound Exchange will be collecting royalties for all music played, even for artists not affiliated to the RIAA and those offering their music for free. An individual broadcaster has the right to negotiate individual rates with artists and labels, but this is beyond most of the small outfits. If one were to concoct a scheme in order to deliberately put the internet broadcasters out of business, it would look much like this one.