For all you folks who listen to Internet radio... enjoy it while you can.

Royalties are now too expensive for about 98% of the current online radio stations to stay in business. Expect your favorites to start disappearing one-by-one... starting very soon.

If you look at the legal records, XM and Sirius are the main culprits, but MTV, Musak and others have joined (and of course, pressure from the RIAA).

Here are a few links:
http://radioboyalan.blogspot.com/200...e-massive.html
http://jonnyw1989.wordpress.com/2007...nternet-radio/
http://blog.yes.com/index.php/2007/0...nternet-radio/

Not sure what can be done about it, but if I find anything, I'll post it here....

I'm definitely cancelling my XM subscription tomorrow.

I like my sirius too...

It does look like the death of internet music based radio. They are now required to pay (what seems like) more royalties than regular radio.

The bummer is this: Smaller artists who have a label deal but aren't yet huge won't get played online because of the new fees. And even bigger artists on major labels who may only have niche followings will lose exposure (which sells concert tickets and CD's plus paid downloads).

Internet radio only helps promotes music sales. Most of the artists making huge music sales anymore (outside of American Idol stuff) are retro acts that appeal to people who still actually buy CD's. What is going to happen in 20 years when people no longer buy CD's?

I agree that the music industry (record labels) only have themselves to blame. They should not only be encouraging internet radio, but lobbying internet radio to play their artists. They should want to encourage steaming of broadcast radio so that the artists they own get even more reach (and more sales).

Be interesting to see how it all shakes out.

The U.S. Copyright Royalty Board has granted a series of requests for a rehearing on a contentious decision that would elevate royalty fees required of Internet radio services.

In a one-paragraph document issued Tuesday, Chief Copyright Royalty Judge James Scott Sledge invited all of the parties who requested the rehearing to submit documents detailing their positions and arguments by April 2.

Feds to rehear Webcaster fee dispute

I'm being hopefully optimistic about this. I LOVE Internet Radio. It's the best radio format available right now.

I second that. I live in a city with 40 radio stations of just about every type format available. But I love internet radio. I can listen to a station in another city and find out what is going on. I can listen to a couple of very niche music formats that I enjoy that are too narrow to be on commercial radio (and inconjunction with that some specialty programs about stuff I like).

Funny how Clearn Channel and CBS radio have recently jumped on the streaming and even podcasting bandwagon... about two years too late. Now that want to stop the small independents doing the same.

The 1990 book Hit Men by Fredric Dannin profiles how the music mafia (major labels) basically have controlled music since the dawn of recorded music and radio. It is a complex read, so I'm not suggesting everyone dig it up on Ebay and digest it. But the bottom line is that the internet has opened up choice to people and they are pissed because they can't stop it without basically getting the government to introduce fees at a level that independents can't pay.

Imagine if Beach TV (and independent) had to pay fees much larger than (for example) WJHG just to keep or renew their license. That would not be fair.

The ironic thing is that the independent internet radio stations are most likely to help the smaller, "starving" artist who is just happy to be played so people know who they are!

Don't get me wrong... Artists should absolutely get paid for what they do. No questions asked. Just as if some other company asks to use Tripsmarter's content... Tripsmarter should get compensated (or work out a deal for a link or whatever)... but Tripsmarter owns the content.

I think that internet radio stations that operate independently should pay a percent of profits to the artists. In fact, that is an amazingly fair deal because if an internet radio station isn't making much (or any) money, then they certainly aren't profiting off of using the artists music.

But placing a per listener, per song fee on internet stations when broadcast stations pay more of a blanket, generic fee is a restriction on free trade.

SoundExchange Softens Stance, Seeks Webcaster Discussions

In the wake of a hotly-contested royalty ruling by the US Copyright Royalty Board (CRB), SoundExchange is now extending a conciliatory tone to internet broadcasters. Last week, the CRB rejected webcaster demands for a rehearing, stirring fears that stepped-up royalty levels would eliminate a smaller class of internet broadcaster. SoundExchange, which represents the interests of major record labels and artists, has resolutely backed the hiked rates, despite the potential fallout. "The music created by artists is the main reason why people listen to internet radio, and those artists should be fairly compensated for the value they bring to each webcaster's business," SoundExchange executive director Jon Simson said following the decision. "Yet, the webcasters refuse to acknowledge this common sense fact." But that hard-nosed style has now been softened somewhat, an unexpected twist in the ongoing drama. "We recognize that there may be certain needs and expectations, as expressed by webcasters in recent days, that might possibly be addressed through direct discussions," Simson said earlier today.

The mixed messages may seem moody, though SoundExchange is now operating from a position of power. The Royalty Board declared its decision final and retroactively effective, though legislative and legal battlefronts are hardly exhausted. That could create a drawn-out dogfight, one that smaller broadcasters will have a difficult time surviving. In its decision, the CRB rejected pleas to delay the increased rates until all legal remedies were finalized. "In just about one month from today ... the Copyright Royalty Board expects internet radio stations to pay millions of dollars in retroactive royalties – and this will drive most stations out of business," said Jonathan Potter, executive director of the Digital Media Association, or DiMA. That is a result that SoundExchange may want to avoid, especially since it creates a void for overseas entrants. "We sought a dialog with these services in order to determine if there is an appropriate business solution that addresses their concerns while still ensuring fair compensation for artists," said Michael Huppe, general counsel of SoundExchange in recent comments. "It is in the industry’s interest to foster the continued growth of Internet radio, and we stand ready to work towards that goal."

Originally posted at Digital Music News

Reply from one of my reps in Washington (both the Senate and the House have introduced proposed legislation addressing this issue... let's hope it passes!):

Dear Mr. Nichols:

I appreciate hearing from you regarding the Copyright Royalty Board and H.R. 2060. Your views, as a member of the North Florida family, are important to me.

As you may know, the Copyright Royalty Board (CRB) sets the royalty rates for Internet Radio stations streaming music. They have recently released new rates for stations eligible under their definition retroactive from 2006, that will gradually increase through 2010. I have serious reservations about the CRB decision to substantially increase royalty rates. Not only will it impact choice, but the Recording Industry Association of America's (RIAA) manipulation of these rates, and the CRB's indifference will hurt working artists, damage small record labels and force law abiding small webcasters, who are already paying thousands of dollars per month in royalties, out of business.

This decision will also damage hundreds of small businesses providing goods and services to working artists, small record labels and small webcasters. These increases are significant and the community backlash to the announcement has led the Board to schedule hearings on the issue this spring. H.R. 2060 has been introduced into the House Judiciary Committee. This bill would reverse the royalty rates established by the CRAB and help internet radio companies continue to provide music at affordable rates so that consumers may continue to enjoy it. I will keep your thoughts in mind when voting on this legislation.

Please continue to write to me, and I encourage you to sign up for my e-newsletter by visiting my website at www.house.gov/boyd.

Sincerely,

F. Allen Boyd, Jr.
Member of Congress