Internet Radio - Saved?

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Washington, Apr 26 -

U.S. Reps. Don Manzullo (R-IL) and Jay Inslee (D-WA) today introduced bipartisan legislation to protect Internet music Web casters from unfair government regulations that threaten to put them out of business and end the access to music over the Internet for more than 70 million Americans.

The Internet Radio Equality Act would reverse a recent decision of the federal Copyright Royalty Board (CRB) to at least triple the amount of royalties Internet radio broadcasters pay to copyright holders for playing a song.
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Read the entire story here:

The Coming Death of Internet Radio

The Death of Internet Radio is Imminent

Artists will be losing money and exposure

The Copyright Royalty Board (CRB) turned down the webcasting community's request for a rehearing on broadcast royalty rates. On May 15, 2007 the new rates go into effect, not only for 2007 but the rates are retroactive for 2006.

The rates will not allow internet radio to continue. They are just too much. Most estimates reveal that the required royalties will exceed gross revenues of internet radio businesses. Combine that with the retroactive royalties for 2006, many people actually face bankruptcy.

How could all of this happen? It just doesn't seem possible does it. Basically what is happening is the big record labels are shutting down internet radio by virtue of the lousy laws that regulate internet radio and the fact that they have the ear of the CRB and they have been able to make the webcasting community look like a bunch of schmucks that aren't paying what they should for playing music.

What is interesting is that terrestrial radio doesn't pay the same royalties that internet radio pays. Their royalty burden is paltry. And satellite radio pays a much, much lower rate than does internet radio.

All of this is pretty unbelievable, right? The large labels want the internet for themselves. They will open their own stations and use them as a point of sale opportunity for downloading and CD sales. Here's the rub. They won't have to pay any royalties to the artists. That's right. Currently internet radio pays Sound Exchange (a so-called non-profit company formed by the RIAA) royalties which, by statute, are distributed to both the label AND the artist. A record label that forms its own station is not under the same obligation to pay the artist as they control the copyright and can give themselves permission to play their own music royalty-free.

The way I see it is that the music companies don't have a clue and are putting the last nail into their coffin. They are screwing a listening audience of some 70 million people that listen to internet radio and they are screwing their artists by denying them royalty payments from internet radio. The artists have largely been silent about all of this and have refused to take a stand and now will not only be losing money but will be losing exposure of their music in a music-first environment that internet radio provides. Because of their inaction, I guess they are getting what they deserve.

What a plan. Good grief.

The only way that this is going to change is if the U.S. Congress steps in and takes action with legislation. But the RIAA has a lot of lobbyists and is very well connected in DC so the future isn't so bright.

Programming Note:

The Sound Cellar will be programming classic rock and some oldies until all of this CRB royalty thing shakes out to a resolution.

We will have some specialty programming at various times - maybe even a live broadcast or two...

We are incredibly bummed out about the internet radio and CRB royalty rates situation, including the lack of artist support of internet radio, so we are somewhat abandoning our mission of playing excellent music, from a wide variety of artists that we love, that is not heard on terrestrial radio.