Thousands Of Webcasters Are Silent Today
June 26, 2007 at 12:19 PM (PT)
Thousands of Internet radio streams went silent today in protest of new music royalty rates that webcasters say could drive almost all of them out of business. Internet radio, which includes providers of all sizes, from giant CLEAR CHANNEL down to countless specialists who serve a few dozen or a few hundred fellow fanatics, has exploded from an estimated 37 million monthly listeners in 2005 to an estimated 52 million today, writes DAVID HINKLEY in THE DAILY NEWS.
But new royalty rates scheduled to go into effect JULY 15 "could shut almost everyone down," says RADIO AND INTERNET NEWSLETTER (RAIN) Editor KURT HANSON. "The new rates exceed total revenue for virtually every existing webcaster." Those rates, set by the federal COPYRIGHT ROYALTY BOARD (CRB) in MARCH, require a per-performance fee of .08 cents retroactive to 2006, .11 cents this year, .14 cents in 2008, .18 cents in 2009 and .19 cents in 2010.
If webcasters can't stay in business, then no one gets anything.
LIVE365.COM CEO N. MARK LAM says one station airing 15 songs an hour to 500 listeners would pay $72,270 a year, which would mean "there is no industry." Stations webcasting through LIVE365 now pay an average of less than $1,000 a year, he says.
SOUNDEXCHANGE, the music industry group that pushed CRB for the new rates, says it ensures labels and artists will be fairly compensated for Internet play.
"But if webcasters can't stay in business," says JOEL SALKOWITZ, who recently launched the popular website ORIGINALHOT97.COM and will join today's protest, "then no one gets anything." SALKOWITZ is urging his listeners to visit www.savenetradio.org for info on making their opinion known to their WASHINGTON representatives.
Big webcasters joining today's protest include MTV ONLINE, YAHOO MUSIC, REALNETWORKS' RHAPSODY, ACCURADIO and LIVE365. Several major companies, including CLEAR CHANNEL, have said they support the protest without going silent.
HANSON said there is "some optimism" the problem can be resolved, noting three avenues are being pursued: a court appeal for a legal stay of the increase; negotiations with SOUNDEXCHANGE; and House and Senate bills called the Internet Radio Equality Act that would fix royalty rates at 7.5% of a station's revenue.
Listeners Overwhelm Server, Switchboards
Floods of listeners trying to simultaneously access the contact info for their DC representatives have overwhelmed a number of the SAVENETRADIO.org servers as a result of today's "Day of Silence" event, RAIN reports.
Switchboards in congressional offices all over CAPITOL HILL are similarly tied up as they attempt to handle today's deluge of phone calls on the issue.