Internet Radio May Cease to Exist July 15 - 90% of stations to go bankrupt thanks to RIAA

[Herman Munster]

http://www.charleston.net/news/2007/jun/14/is_internet_radio_doomed_new_rates_threaten_wipe/

Internet-based stations must pay a per-song rate for broadcasting a copyrighted song. The per-spin fee comes in response to ever-declining record company revenues due to poor CD sales. The Recording Industry of America (RIAA), the trade group that represents the recording industry's largest record companies, proposed increased rates earlier this year for Internet radio stations. These fees do not apply to broadcast (terrestrial) or satellite radio.

Shocking many in the music industry, the proposed rates were quickly approved by The Copyright Royalty Board and will go into effect on July 15. Previously, all Webcasters running music-based radio stations operated under the Digital Millennium Copyright Act, paying an annual fee, plus 12 percent of the stations' profits to the music industry's royalty collection organization, SoundExchange. The new rates charge Internet stations a performance fee for each song streamed.

Because the current rates are retroactive to January 2006, an estimated 90 percent of Internet stations will go bankrupt as soon as the rates go into effect. "It's outrageous," said Odom. "We can't survive if these rates remain in place. The royalty fees would be higher than our revenues." Small Webcasters aren't alone. Large streaming sites like Pandora, AOL Radio, Yahoo and Live365 are also facing a grim future.

[Kat45]

1. Why doesn't the industry realize that the internet stations are publicizing lots of their songs

Many of these are songs that don't get play on broadcast radio stations. They are songs that the labels don't put publicity dollars into. By being played on these stations, more people will hear them then perhaps like them and buy the music. Not a good move by the industry for its own interests, and very bad for music lovers everywhere who like to check out different kinds of music online.

[LiberalFighter]

2. Guess how much revenue RIAA will receive now?

[lovuian]

3. I watch this copyright kill the music industry

its amazing it watch it destroy itself

[Herman Munster]

4. there is bill going through congress that will save internet radio

People need to contact their representatives and senators.

http://www.savenetradio.org/

[villager]

5. another routine corporate outrage. More here:

http://www.radioparadise.com/

As an accomplished band manager I know says, the old "CD revenue" model is entirely about record company execs holding on to perks and gargantuan salaries. It's not even remotely about "the music..."

[BattyDem]

6. The record companies have less revenue because of declining CD sales ...

so they're eliminating the radio stations that play/promote their music? Won't that cause sales to drop even further? :shrug:


I have an idea ... get rid of the RIAA and give their share of the profits to the artists who actually create the music! As for the record companies - maybe if they stopped treating customers as criminals and embraced the technologies that both artists and consumers love, their profits would go up!

[agincourt]

7. No amount of advertising,

can make up for the bad publicity that the RIAA has given the music industry. They are destroying the music industry better than file-sharing could hope to. That and the execs promoting brain dead music that sounds like jingles for vibrator commercials.

[hyphenate]

8. The RIAA

consists of overpaid assholes and their "yes" men, who follow the same basic rules as the mob: be heavyhanded and carry a huge stick. Remember: this is the same group that sued an 11 year old, looking for thousands of dollars for downloading MP3s illegally. Whether the child was downloading or not isn't the matter--it's how the RIAA did it, and their lack of diplomacy and tact.

I never thought I would say this, but the IRS is filled with angels compared to the RIAA. And yes--having worked for awhile in a major music company, I know how high some of those salaries are, and yes, they were very much overpaid. Does $250,000 for a middle management job sound like too much? (And that was over 10 years ago.)

Careers being built on the shoulders of 11 year olds. I wish someone would make a cartoon on that.