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Doomsday Approaches For Web Radio

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Sunday, July 15, 2007. Remember that date if you’re an Internet radio fan. It could be the day independent stations go offline. The RIAA wants its money, and it wants it by Sunday.

Earlier this year, the Copyright Royalty Board tripled royalty rates for Internet radio services and made the rate hikes retroactive to January 2006. Payment is due July 15.

Webcasters staged a day of silence on June 26 to protest the rate hikes, arguing that they could be put out of business. Though the silent message was sent loud and clear, the CRB doesn’t appear to have been listening, and so far, neither have the powers that be.

The likelihood that Congress will pass legislation to nullify the hikes, proposed in both the House and Senate, in the next four days seems slim, but that hasn’t stopped numerous organizations from pleading for citizens to contact their legislators to push it through.

Radio and Internet Newsletter (RAIN), the group that organized the day of silence, has filed an emergency stay with US Court of Appeals in the hopes to delay the hikes until Congress can pass legislation.

Independent radio station SomaFM is trying to rally the troops as well and says that the royalty rate hikes amounts to a 3000% increase in costs, with royalties costing them as much as $600,000 for 2006.

"Our costs for music are set to go up 30 times what they used to be. Even if we’re playing the same songs. That doesn’t make any sense at all," says Rusty Hodge, Founder and General Manager of SomaFM.com. "The RIAA’s refusal to make a reasonable settlement with small commercial webcasters is an insult.

"The RIAA keeps saying that most webcasters are billion dollar companies, but with the exception of AOL, Yahoo and Real, most of the top-20 music webcasters are privately-held, independent operations. The RIAA is willing to let independent webcasters be the collateral damage in their battle to extract more control over the large webcasters."
 
Some have argued that those same large corporate presences have been dragging their feet in the fight, willing to let Sunday’s deadline weed out competition. After that, they can begin waging lawsuits, a luxury smaller entities won’t have.

The Seattle Times has called the CRB’s rate hikes an "assault on one of the last escapes from bland commercial radio." The editorial also notes that it will not just be small Internet radio stations, but also public broadcasters that stand to suffer. 

Doomsday Approaches For Web Radio
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  • http://www.spin.com SPIN.com

    Hi there – thanks for your input on the controversy surrounding the internet radio royalty situation. We’ve quoted your comments as part of our “Everybody’s Talking About…” section on SPIN.com – you can check it out here: http://www.spin.com/features/everybodystalkingabout/2007/07/070712_internetradio/