Afterrejectingproposed webcasting royalty rates, the Librarian of Congress last week announcednew rateswhich directly threaten the existence of many small internet radio stations. The rates are half the proposed rates set forth by the Copyright Arbitration Royalty Panel, but neither the RIAA or the webcasting community are happy with the rate structure. The RIAA balks the rates are not "fair value" for music rebroadcasts, and webcasters feel the rates are too high and threaten their business models. The rate structure is also retroactive back to 1998, and webcasters have 45 days to pay up. This has led many internet radio stations, such assoma fm, to close up shop.
The new rates are not binding and webcasters can strike their own deals with the music industry, but with the current RIAA stance it is doubtful many internet radio stations could avoid harsh royalty payments. The RIAA has been hit recently with slagging CD sales, the threat of piracy, millions lost in legalpayolaand still comes off as greedy and (dare I say) stupid in dealing with technology which could help their revenue streams. Internet radio could provide the music industry with alternatives to the cookie-cutter traditional radio stations. Streamed music is readily identifiable while played, while information about bands and links to online sales of songs could be a click away. Instead of embracing internet radio, the RIAA sees the technology as a threat to current revenue streams and seems intent to squeeze blood out of a turnip.This articleoutlines the some of the paranoia pervasive in the recording industry.
