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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