The fate of internet radio

UPDATED BELOW.
The Copyright Royalty Board voted Monday to uphold its March ruling that will change the royalty structure for online radio stations. Under the old set-up, commercial radio stations all paid a flat fee and then paid 12% of their profits (source). The new set-up will apply until 2010 and will charge a flat rate per-song, per-user, plus $500 for every channel owned by a station. The rates per-song will increase until 2010, going from .07 cents (in 2005) to .19 cents (in 2010) (source). This will only effect internet broadcasts.

I believe in paying artists for their work, but I do not see how this is going to help artists in the long run. Stifling broadcasts will not help artists get their songs heard. I listen to a lot of internet radio and probably hear about most of the bands I listen to through it. I don't know if I'd hear about little bands from other states without it. Services like Pandora, whose goal is to expose listeners to new music, have completely expanded the sample of music possible for me listen to, and it is very much threatened by this new ruling. How will small bands get heard? How will buzz spread?

I don't have the hippest taste in music. I'm not chasing the next it band, but rather I'm looking for some connection to music. I want a better understanding about who the musicians are and what their sound is about. I find this easier find online. And I try and support the internet radio stations I listen to. I subscribe to KCRW out of Santa Monica because I stream their program Morning Becomes Eclectic fairly often. (What will I do without access to Nic Harcourt's show?) I do this because I understand there are more costs to stream content online and I want to contribute to a community of which I feel a part.

I encourage you to go to Savenetradio.org and sign their petition to try and overturn this ruling. There is also an easy form to send a letter to your representatives in Congress. I'm not sure if it will help, but this is a huge step backwards for technology and the music industry.

From Tim Westergren of Pandora:

Understand that we are fully supportive of paying royalties to the artists whose music we play, and have done so since our inception. As a former touring musician myself, I'm no stranger to the challenges facing working musicians. The issue we have with the recent ruling is that it puts the cost of streaming far out of the range of ANY webcaster's business potential.

Reg of Reg's Coffeehouse about the music he plays:

The music I play comes from a place inside me, not from a corporate playlist, not research, nothing calculated, nothing pre-planned. It reflects what's going on in my life, the world, my community and in my listeners. It is reality radio. No shine, no gloss, just radio by the seat of your pants.

Other sources:
FAQs about the ruling.
Radio and Internet Newsletter by Kurt Hanson of Accuradio.
ARS Technica post about the ruling.
BBC article on Monday's ruling.
Article about first ruling in March (from Salon).

Cross-posted.

************************************
The blog for the SaveNetRadio has more specific information. Read the comment sections, as well, for better discussion of the issues.

Comments

[grasshopper]

This interests me and I'm ashamed to say I know almost nothing about it. Thanks for showing me a few places to look, Claire.
The radio-play and payment, though, may be the least of problems pitted against musicians today. The business is in such flux, it hardly matters what's up or down. Musicians, many of them mixing old songs into new, find their best tracks downloaded and played-out before their indie labels can push the product.
Some hip-hop "artists: cash in by indulging in unforgivably, hateful language, fooling with stereotypes that should have died a hundred years ago.
But others are coming up with gorgeous mixes, loops of songs wound through speeded up or slowed down beats set in a context that makes them startling new, and arrestingly beautiful. These men and women are mostly unknown, though, and so susceptible to getting mugged they may never manage to stand up and play again.

[Chuckles]

I wonder what effect this will have on internet radio broadcast from other countries. My brother and his wife listen to an internet broadcast of a radio station in Bratislava. I will have to do some research and with all these links, I have a good place to start. Thanks!

[Claire]

Chuckles,
From what I've read, it won't. LastFM won't be affected because it's based in England. I was wondering if then Pandora moved to Mexico if it could still work.

[Adorable Girlfriend]

Thanks for the link, Claire. I signed the petition. Very easy to do!