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| Chilling Effects Clearinghouse > Weather Reports > The Silencing of Internet Radio? | 
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|  The Silencing of Internet Radio?Jeremy P., Samuelson Law, Technology, and Public Policy Clinic - Boalt Hall, March 12, 2007 Abstract: Internet radio has become a place where small independent radio stations can thrive by offering a different music mix than broadcast radio. This, however, is in danger, due to a recent decision by the Copyright Royalty Board. Internet radio has become a place where small independent radio stations can thrive by offering a different music mix than broadcast radio. Thanks to a recent decision by the Copyright Royalty Board, however, these small independent stations are in danger. The Board's decision would require all webcasters, even the small ones, to pay on a per-song, per-listener basis, retroactive for 2006; meaning "the more intensively an individual service is used and consequently the more the rights being licensed are used, the more the service pays, and in direct proportion to the usage." The decision is in stark contrast to the royalties regime in place for the last four years which allowed revenue-based royalty fees for smaller webcasters. For instance AccuRadio, which started in 2002 offers 300 music channels aimed at adults, is threatened with extinction. This site receives 1 million visitors a month, but only has $500,000 in annual sales, yet it is still $100,000 shy of the expected newly approved retroactive royalty costs for 2006. The issue involves more than just the costs of providing radio over the internet. It is also a matter of highly different royalty regimes. A study by BetaNews concluded that these new rates would create a drastic difference between broadcast and internet radio royalty costs. According to BetaNews, broadcast radio stations paid an average of $1.56 per listener for 2006, while internet radio sites will pay $8.91 per listener for 2006. This disproportionate burden upon internet radio restricts the potential of internet radio, and possibly silences its real advantages. Not only will the decision potentially silence start up internet radio sites like AccuRadio, it also suppresses internet radio sites that introduce listeners to new music like Radio Paradise. Radio paradise offers an eclectic mix of rock music commercial free due to its support from listeners. The internet has been able to offer a different style of radio, like Radio Paradise, than what some refer to as the "homogenized, corporate radio" over the air waves. However, these rate hikes may bring internet radio sadly in line with broadcast radio. Not only does this hurt the listeners who desire something different, but also the performers not so tailored for the mass market. Radio Paradise has had great success in offering a music mix that is not only different, but also introduces new artists to listeners who then go buy the albums. New up and coming artists will also be deprived of the ability to use these introductions through internet radio as a launching pad to something bigger. Internet radio can also better service niche markets not served by broadcast radio due to its widely scattered listening base. These and other valuable characteristics of smaller station internet radio are in danger due to the recent decision of the Copyright Royalty Board.
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