SAVE INTERNET RADIO
June 21, 2007
Wall Street Journal
Article by Sarah McBride (Page B6)
By SARAH MCBRIDE
June 21, 2007; Page B6
Music fans tuning into their favorite Internet radio stations next Tuesday
might hear nothing but silence.
Web broadcasters are planning to turn off their music for the day to
protest higher statutory royalty rates payable to artists. Some of the largest
services, including Live 365 Inc., Pandora Media Inc. and Yahoo Inc.'s
Yahoo Music, are participating in the blackout, which organizer
Kurt
Hanson of online-radio service AccuRadio has dubbed "Day of Silence."
MORE ON INTERNET RADIO
. Page One:
Internet Radio Races to Break Free of the PC (06/18/07) .
Online-Radio Royalty Fight Reaches New Pitch (05/31/07)
** Many online broadcasters say the new rate structure -- which will cost
some of them several times their current total revenue -- will put them out
of business. The new rates, announced in March, start at 0.08 cent per
song, per play, per listener, retroactively starting in 2006, and rise to 0.19
cent
by 2010.
The fees start coming due July 15.Online music titan AOL isn't participating.
"We felt it would impact theoverall consumer experience and the paying
members
of our radio subscription service," says a spokeswoman for AOL, a unit
of Time
Warner Inc. Clear Channel Communications Inc., another big online music
company, says it hasn't decided whether it will participate.
"Silence" means different things to different online broadcasters.
KCRW,
a Santa Monica, Calif., public radio station that runs a popular music
stream, says it will instead broadcast an hourlong forum in which Webcasters
will discuss the impact of the higher rates. It will play the forum, "D-Day
for
Webcasters," in a loop all day. Some other services, such as Live365,
will link to it.
SoundExchange, the organization that collects the fees on behalf of
artists and labels, has proposed some relief for smaller Webcasters.
But many Webcasters don't like that proposal, saying it would discourage
growth.
The industry held a day of silence on May 1, 2002, shortly after rates
of 0.14 cents per song, per play, per listener were proposed. In June 2002,
the Librarian of Congress cut those rates in half, but even that rate was
prohibitive for some of the smaller broadcasters. Later that year, Congress
passed a law allowing small Webcasters to pay a percentage of their revenue
in
royalties instead of the per-song rate.
This time, the Librarian of Congress has no authority over the rates,
which
were set by a panel of federal judges. Legislation has been introduced
in Congress that would cut the rates.
Instead of paying the statutory rates, the online companies have the
option
of negotiating rates separately with each artist or label, but that can
be a
very time-consuming process.