Slowly, but surely, internet radio broadcasters are shutting down. As I mentioned last week, the Librarian of Congress was due to announce his decision on performance rates for internet radio on June 20.
Well, sure enough, the announcement came. Wired — delusionally deciding that this is a good thing — announced “Webcasters Fees Slashed in Half”. And it’s true: they were slashed in half, from US.14¢ per song per listener to US.07¢ per song per listener. Which means that the 1,000 listener per hour station which has been broadcasting for the past 3 years will only owe a quarter-million US dollars in royalties, rather than a half-million! Wowee!
Stations are disappearing quietly. SomaFM‘s home page reads “Killed by the RIAA. June 20th, 2002″. NetRockRadio is silent, their home page declaring June 20th, 2002 as “The Day the Music Died.” MoreMusicRadio says, “It’s Sad to Say Goodbye.” Tag’s TranceTrip says, “Off the Air.” Perkigoth says, “Killed by CARP, Harassed to death by SESAC!” The Downbeat says, “One day RIAA will be seen for what they truely are…” Flaresound says, “Shutdown because of RIAA on June 22nd, 2002.” There will be many more.
RIAA says its not their responsibility to “subsidize the webcasting businesses of multi-billion dollar companies like Yahoo, AOL, RealNetworks and Viacom.” (Strangely enough, AOL & Viacom are major members of the RIAA, with AOL/Time Warner providing nearly 20% of their yearly budget, according to the folks at MonkeyRadio — another silent station, whose founder happens to be the developer of WinAmp, now owned by AOL.) Strange, how they consider that allowing internet radio stations to expose their music to potential buyers is a subsidy, when this is exactly the same thing they provide to terrestrial and satellite radio. In fact, they illegally pay the broadcasters to play their records over the public airwaves which we license to the broadcasters for much less than their true value. (Check out the pitifully small FCC license fees paid by even the largest radio stations: WCBS-AM in New York, reaching 14.5 million potential listeners paid just US$4,550 for its broadcast license last year!)
With a bit of “too-little-too-late”, Mark Cuban, owner of the Dallas Mavericks, who sold his Broadcast.com to Yahoo for US$5B, told RAIN that the deal his company was negotiating with the RIAA was was “designed so that there would be less competition, and so that small webcasters who needed to live off of a ‘percentage-of-revenue’ to survive, couldn’t.” This was the deal which the Copyright panel used as the basis for its determination, since it was the only deal out there! And then, just to rub a little salt in the wound, Yahoo announced today that it was going to close some of its streaming audio sites. Although they claim that the CARP ruling had nothing to do with it, RAIN reports that the negotiated deal with the RIAA expired at the end of 2001.
So what’s the future? Well, Canada is proposing legislation similar in effect to the CARP royalty structure: C$0.25 per month per listener, payable to SOCAN, the Canadian equivalent of the RIAA. RantRadio is spearheading the fight to keep alive diversity in internet radio in our northern neighbor. I’m not sure what’s happening in Europe right now — the situation there may be a little different, since radio stations are mainly state-owned and therefore not as fearful of internet upstarts as their brothers in the US.
The most important thing you can do is write your Congress-people. There’s a form letter which you can have faxed to you Senators & Representatives, as well as other actions you can take, listed at SaveInternetRadio.org.
