Yahoo! and AOL may shut down their Internet-radio services, which have become a pricey proposition for the two online companies because of the 38% royalty increase mandated by SoundExchange. "Yahoo and AOL stopped directing users to their radio sites after SoundExchange, the Washington-based group representing artists and record labels, began collecting the higher fees in July.... As a result, the number of people using Launchcast fell 11 percent to 5.1 million in October, according to ComScore. AOL Radio users declined 10 percent to 2.7 million from 3 million." [Bloomberg]
Yesterday's deal between royalty-collection company SoundExchange and small Internet radio broadcasters has been met with scorn from a few prominent Webcasters, who say that a quirk in the deal means that they'll still have to pay out more money than they can afford:
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Small webcasters—those who make less than $1.25 million in annual revenue—have cut a deal with SoundExchange allowing them to pay only 10-12% of their annual income to the royalty-collecting agency. Radio stations have until Sept. 14 to sign up as a "qualifying small webcaster," otherwise they'll be forced to hand over a lot more money. [Contentinople]
When we last checked in on the Internet radio royalty debate, it looked like SoundExchange and the Digital Media Association (DiMA) were on the verge of coming to an understanding of sorts—last Thursday, SoundExchange said that as long as webcasters were better about reporting, and worked on a technologically feasible solution to stop stream-ripping (apparently, there are people out there who still do that. Who knew?), SoundExchange would allow radio stations to stream while new royalty rates were worked out. Or did they? A timeline provided by Listening Post outlines the back-and-forth the two organizations have had over the past few days:
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The fight to lower royalty payments for streaming radio stations isn't over by a long shot, but SoundExchange has agreed to revisit the issue—and, more importantly, it won't start enforcing the proposed higher royalties come Monday morning, so your favorite streaming station likely won't go away. (Yet.) [Listening Post]
U.S. Court of Appeals in Washington, D.C., denies Webcasters' motion to delay the July 15 royalty-rate hike, putting the ball for saving most Internet radio stations' streams in Congress' court. [Loudersoft]
Although the increased royalty rates for netradio stations don't kick in for another four days, a guy who runs a station playing nothing but Christmas carols (!) "and hundreds of other free Internet radio stations already have shut down." On the one hand, that sucks; on the other, who can listen to Christmas carols all day without gouging their eyes out? [LA Times]
It's been two days since the Internet radio day of silence, and today at 10 a.m. ET, the House of Representatives' Small Business Committee will hold a hearing about the Copyright Royalty Board's decision to raise royalty rates for Webcasters. RAIN has a breakdown of the witness list, which includes the general manager of WOXY on the anti-rate-hike side and the chairman of Tommy Boy Records opposing him. No word on whether or not this hearing will show up on any of the C-SPAN channels, but the committee does have a YouTube channel, so perhaps highlights will pop up as the day goes on.
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Today is the Day Of Silence for Internet radio stations, and we're wondering how the Idolator readership is involving itself in the (in)action, which is protesting the high royalty rates for online radio that were set by the Copyright Royalty Board last spring. According to the radio industry newsletter RAIN, the SaveNetRadio site, which many of the participating broadcasters have been linking to, has been experiencing crippling delays from users who have been directed there, and switchboards on Capitol Hill have been lighting up with cries of protest. Meanwhile, the sites that aren't participating, like last.fm, are taking some heat from listeners, and other observers are a bit skeptical about the whole protest. If any of you have contacted your legislators, please let us know in comments—especially if any sympathetic switchboard operators have been jonesing for their KEXP fix.
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If your favorite Internet radio station isn't playing music next Tuesday, don't panic! They're just taking part of the "Day Of Silence," in which thousands of webcasters will cease broadcasting in order to protest the proposed royalty-rate hikes that could put them out of business. So actually, maybe you should panic, because these raised rates are going to be severe. The participants include KCRW.com and Live365.com, and in case you're wondering just what constitutes a technical "day of silence," the Radio And Internet Newsletter has the answer:
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2007 is looking to be the make-or-break year for Internet radio: While the Copyright Royalty Board is busy trying to raise digital royalty rates—a move that could potentially put several big Internet-radio stations out of business—several companies are thinking to the future, and trying to develop technology that will allow you to listen to webcasts no matter where you are. From today's Wall Street Journal:
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The proposed increase in per-song royalties isn't the only fee that is making Web broadcasters nervous about their revenue streams. As CNet notes, the larger broadcasters—including RealNetworks and Pandora—may have to shell out more than $1 billion because of the large array of channels they offer:
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Today SoundExchange, the organization that is responsible for collecting royalties from digital music outlets, proposed a change to the Copyright Royalty Board's planned royalty hike for Internet radio stations, which is set to go into effect in July. In the new plan, smaller webcasters would pay royalties equal to 10% of all gross revenue up to $250,000, and 12% for all gross revenue above that amount, with no rate hikes until 2010—although what exact criteria define a "small webcaster" is still up in the air, which is part of the reason why SaveNetRadio, the ad hoc coalition of webcasters protesting the Copyright Royalty Board's decision, said "no thanks" to SoundExchange's offer:
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Kurt Hanson's Radio And Internet Newsletter is reporting that the due date for online radio stations to pay higher royalties for streamed music has been pushed back from May 15 to July 15 by the Copyright Royalty Board. While the fate of the Internet Radio Equality Act, a law that would overturn the new royalty rates, is still up for debate, Hanson sees the push-back on the due date as a good sign for webcasters:
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Editor's note: Aside from a few Clash lyrics, your Idolators know nothing about the law. Which is why we're proud to present another missive from the IdoLawyer, an anonymous California attorney who will be weighing in on various music-related matters. While her column isn't intended as legal advice, it is sage advice nonetheless, and today she takes a look at the institution that will help decide the fate of Internet radio:
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In what can only be seen as bad news for your favorite streaming radio station, the Copyright Royalty Board—the branch of the Library of Congress that's charged with enforcing copyright licenses—rejected the appeals of Internet broadcasters to reconsider the new, and much higher, royalty rates for broadcasting songs online, and reminded them that their first checks need to be in the mail by May 15.
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