IP: Adios, Internet Radio (or they will kill the visions of the internet yet .. First low power FM then ... Djf)

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: Anthony Watson <Anthony.Watson () dollarsandsense com>
Date: Wed, 03 Apr 2002 18:31:13 -0800
To: farber () cis upenn edu
Cc: dave () farber net
Subject: Fwd: Adios, Internet Radio


> ADIOS, INTERNET RADIO
>
> -- By Chris Gonsalves --
>
> I'm a fan of Stardog, personally. Maybe you like CelticGrove
> or BlueCityJazz. Doesn't matter. In a few weeks, listening
> to music on Internet radio will be dead as a mackerel.
>
> Shame really. The Internet radio business has been growing
> at something like 100 percent annually and is thriving in
> genres underrepresented on FM stations, such as classical,
> blues, jazz and gospel. Doesn't matter. The government,
> acting once again in the special interest of the music
> industry, is about to crush the idea.
>
> In the latest example of groundless regulation and greed
> interfering with free commerce, the U.S. Copyright Office is
> considering a proposal that would force Internet radio
> stations to pay exorbitant royalties to record companies and
> performers, something their over-the-air counterparts are
> not required to do.
>
> Where AM and FM radio stations pay a small fee to music
> composers, Internet radio stations are facing fees of up to
> 14 cents per listener per song. That fee would bankrupt
> nearly all of the Web broadcasters operating today,
> according to the group saveinternetradio.org.
>
> Copyright officials have until May 21 to make the call, but
> considering that the recommended shakedown came from the
> advisory group they created--the Copyright Arbitration
> Royalty Panel (CARP for short)--it's clear the rubber stamp
> is warmed up and waiting.
>
> How did we get to this point? Even if you thought Napster
> and others of their ilk were the bad guys, how did Internet
> radio become to the target of the Harry Fox crowd? It began
> in October 1998, when Congress passed the "Digital
> Millennium Copyright Act" (DMCA), which gave record
> companies the green light to collect royalties when music
> was played via "digital media" such as Internet radio.
>
> It's an interesting departure from a music industry
> standpoint. Record companies and performers don't get
> royalties from AM and FM radio play because the copyright
> folks consider the promotional value of the airplay payment
> enough. So why the switch for the Internet? The theory
> bought by Congress is that Internet listeners can make
> "perfect copies" of the songs being streamed, and those
> copies could hurt CD sales. That would be a good argument,
> except that, as anyone who listens to Internet Radio knows,
> you can't make "perfect copies." You can't easily make
> copies at all. And if you can, they are of too low a sound
> quality to be useful in creating your own CDs. What you get
> sounds pretty much like those cassette tapes you used to
> make off the FM radio. Not great.
>
> Never ones to let facts stand in their way, the solons
> assigned to the CARP published their recommended royalty
> schedule in late February. As the basis for the outrageous
> fee schedule, the CARP report cites a $5 billion deal
> between Yahoo! and Broadcast.com. The result was a figure
> that would leave most Internet broadcasters, who have
> attracted precious little advertising, liable for between
> 200 and 300 percent of their gross revenues. And, oh, by the
> way, the fees are retroactive to October 1998. According to
> Internet radio industry figures, a midsize independent
> Webcaster with an average audience of 1,000 would owe
> $525,600.
>
> See you later Stardog. It was nice knowing you.
>
> To e-mail eWEEK Deputy News Editor Chris Gonsalves,
> click here:
> mailto:chris_gonsalves () ziffdavis com



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