Sunday, The Beginning of the End for Internet Radio
July 13, 2007 4:24 PM
comment(s) - last by
Increased royalty fees may force some internet radio stations to shut down
Over the last year, the online music industry has been in what many call as a major shakeup. Music artists and labels represented by SoundExchange say they are being treated unfairly, receiving less than a fair amount of money being generated by online radio stations. SoundExchange has been lobbying Congress over the last year to force online radio stations to pay for or pay higher royalties for songs played.
Working closely with Congress, SoundExchange has
successfully convinced the industry that increased royalties are a necessity
. The D.C. Circuit Court of Appeals has declined to put a stop on increased royalties. This Sunday, Internet radio stations will be slapped with a bill forcing them to pay higher royalties going forward and
pay for music aired in 2006
. By 2010, royalty rates will nearly triple what stations currently pay. Stations will also incur an annual fee of $500, but
the annual fee hasn't been fully worked out
. SoundExchange is unsure if it wants stations to pay $500 per station or per channel.
"This is just about the artists getting paid fairly. Artists and labels just want a fair share of the pie," said Richard Ades, a SoundExchange representative.
Late last month, many online stations banded together for a single day of silence,
marking their stance against SoundExchange and its demands
. Called "Day of Silence," the move created public awareness about how damaging the new proposed royalties could be. Despite the demonstration, SoundExchange chief executive John Simson said, the "rates are fair."
Tim Westergren, founder of Pandora, one of the largest Internet radio companies, said, although his company is able to pay for the new royalties he and his company would not go down without a fight. Pandora along with Yahoo, Rhapsody and Live365 represent the four largest Internet radio companies today. Whether large or small, all types of broadcasters will be affected. SoundExchange said it has taken this into account. Small and non-profit broadcasters will have a royalty cap of $50,000 per year -- still a very large amount.
"Nobody wins when Internet radio gets shut down, including artists who ostensibly are being represented by SoundExchange, the organization pushing for high rates. It's ironic. If SoundExchange gets their way, it means less money for musicians because people will cease to pay royalties all together," Westergren said.
Even with the cap, small broadcasters are still in distress. Michael Clark, owner of two small stations said that after Sunday, he would owe roughly $14,000 USD just for the holiday season of 2007. As for all the music that his station broadcasted during the 2006 year, Clark will owe $8000 on Sunday. One of Clark's stations already closed down because of the new changes and he was unsure of what to do after Sunday, he said.
Jake Sommers, owner of a similarly small station that plays jazz faced similar decisions and consequently closed down his station. Jazzplayradio.com closed on April 30th of this year when Sommers realized he would have to pay $2000 per month to keep his station of 20,000 listeners afloat.
"We never made a dime. It was a labor of love. Everything we made we put right back into radio station. It was a bunch of trumpet geeks playing music for other trumpet geeks," Sommers said.
As Patty Smyth once sang, "sometimes love just ain't enough."
This article is over a month old, voting and posting comments is disabled
RE: Chicken little
7/15/2007 11:16:09 PM
"Next year they will tell you to die and ride the comet. Will you comply?"
VERY NICE REFERENCE - to all those people trying to argue against you, please read ATLAS SHRUGGED and then you'll understand what he (or she?) is talking about!!!
AGAIN very, very nice!!
thanks for the reference, more people need to read that book
RE: Chicken little
7/16/2007 12:34:23 AM
People should try biting off the Fountainhead first. More story, more moving, less being clubbed over the head by Ayn Rand's Objectivist Doctrine.
"I f***ing cannot play Halo 2 multiplayer. I cannot do it." -- Bungie Technical Lead Chris Butcher
Internet Honors "Day of Silence" to Save Online Radio
June 27, 2007, 2:17 PM
Live365 Latest Organization Requesting Stay on Royalty Increase
June 2, 2007, 12:01 PM
SoundExchange Forces Webcasters to Pay Royalties
March 6, 2007, 7:59 AM
WebOS Class Action Settlement Costs HP $57 Million
April 1, 2014, 10:22 AM
IBM Workers Strike Over Terms of Deal That Will Have Them Working for Lenovo
March 6, 2014, 9:29 AM
Google Picking Up Artificial Intelligence Company "DeepMind" for $400 Million
January 27, 2014, 9:25 AM
Quick Note: Qualcomm Grabs up Palm, IPAQ, and Bitfone Patent Portfolio from HP
January 24, 2014, 9:18 AM
Verizon Buys Intel Media OnCue Cloud TV assets
January 21, 2014, 10:26 AM
Google's First Asian Data Centers Now Operational
December 11, 2013, 8:50 AM
Most Popular Articles
A Bug's Life: Female Cave Bugs Have Penises, Penetrate Males for Three Days
April 17, 2014, 7:20 PM
HTC Hires Former Samsung Marketing Chief Who Developed "Galaxy" Brand
April 18, 2014, 6:00 PM
NASA Finds "Habitable Zone" Planet Sized Similar to Earth
April 18, 2014, 3:13 PM
Mounties Arrest 19-Year-Old Who Delayed Canada's Tax Filing w/ Heartbleed
April 17, 2014, 3:24 PM
Thanks to Government Crackdown, Chinese "Porn Cop" Has Watched 600K Adult Videos
April 21, 2014, 12:00 PM
Latest Blog Posts
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information