Future of Internet Radio In Jeopardy

In some ways this is a follow-up to the last post. I feel somewhat irresponsible posting about all these great sites for hearing new music at a time when the mere existence of independent internet radio is being threatened by an enormous royalty rate increase.

Brief summary from DiMA:

On March 2 the Copyright Royalty Board issued the rates and terms for Internet radio royalties covering a period from 2006-2010. The ruling ignored webcasting community proposals and set out the SoundExchange proposed “per performance” rates (below) and a $500 minimum fee per station/channel.


As I understand it, the $500 minimum per station applies to each user defined station. For example, I have eight stations set up on Pandora (I believe the limit is 99). Under the new pricing, Pandora will be required to pay $4,000 / year for my account alone, regardless of how often I listen to the stations. Of course, for the stations I do listen to, the per play rate for each song will also increase. That $4,000 represents only the minimum Pandora would owe; the actual amount would be significantly higher. While Pandora is a free service, they do offer an "upgraded" pay service which I choose to support. It costs me $36 per year.

Worse yet, the rate hike is retroactive to January 1, 2006, so that most of these independent stations will immediately be hit with a massive debt.

For more information, please check out SaveNetRadio.org, Digmedia.org, and Live365.com. If you only click on one link, make it this one, and take a moment to read the three posts there. Among other well written thoughts, the second post includes an explanation of who SoundExchange is and where they came from.

Lastly, it is important to note that internet based radio DOES pay royalty fees. While many sites offer free service or charge minimal monthly fees, there is still a cost to broadcasting. It's this cost that has kept "soundbetter.net radio" in the idea stage for several months. (Hopefully it'll happen, assuming the cost stays affordable.) This current debate is over the extreme prices the new rates will lead to, which greatly exceed the fees assessed to Satellite and standard AM/FM radio broadcasts. All explained in more detail at the aforementioned sites.