I’m just now tuning in to this really, really unfortunate controversy over Internet radio royalties. Basically, from here it looks like independent Internet radio is pretty much dead after the latest news. This is too damn bad — I was never much of a listener, but I did enjoy popping over to Aural Moon once in a while, especially for Sean Powell and Sean McFee’s shows. There are good summaries of the issue — specifically, a March ruling that would force Internet radio providers to pay massive royalty fees — at Ars Technica and Save Our Internet Radio. The following is from the latter site:
On March 2, 2007 the US Copyright Office stunned the Internet radio industry by releasing a ruling on performance royalty fees that are based exclusively on the number of people tuned into an Internet radio station, rather than on a portion of the station’s revenue… Under this royalty structure, an Internet radio station with an average listenership of 1000 people would owe $134,000 in royalties during 2007 - plus $98,000 in back payments for 2006. In 2008 they would owe $171,000, and $220,000 in 2009.
Like so many other things the RIAA has done, this doesn’t even seem to make very much long-term economic sense. If I understand this correctly, this is obviously going to drive all but the biggest corporate Internet radio sites out of the market. Unlike file-sharing, where the arguments are a bit muddier, Internet radio is a pretty obvious case of a distribution mechanism by which listeners “try before they buy” rather than simply taking and running. I can’t imagine there are many folks out there making the effort to copy low-quality Internet radio streams to MP3. Instead, they’re listening casually, hearing the occasional song they like, and then maybe buying the CD off of that experience.
All this of course is my own conjecture and based on no evidence at all, but I can’t for the life of me figure out what the industry would accomplish by condemning Internet radio to extinction. It’s true that artists and labels probably were receiving very little in the way of royalties from Internet radio, but now they’re not going to be receiving any.
Also, speaking of Aural Moon, over at their discussion forums there’s a pretty active thread on this matter.