[BC] The END of Internet Radio?

[ChuxGarage@aol.com]

In a message dated 3/7/2007 10:51:05 A.M. Central Standard Time,  
broadcast-request at radiolists.net writes:

>Why  should webcasters get a free ride on music royalties?  I'm no fan  of
>the RIAA/BMI/ASCAP/et al either, but if some of us have to pay,  then
>everyone should.  I think this will mostly affect the college  kids with
>Winamp playing pretend radio station...I doubt most of those  streams have
>more than a handful of listeners anyway.  If internet  streaming is as
>popular as its proponents claim, then selling  advertising to offset these
>fees should be a piece of  cake.




Webcasters haven't had a free ride.  They are required to pay a filing  fee 
with The Library of Congress and pay royalties to Sound Exchange.   There is 
nothing free about it.  The new rates are the problem.  They  are retroactive to 
January of 2006, which will cause big problems for anybody  who is streaming, 
and that includes terrestrial radio stations.  It is very  bad news for 
anyone who worked on the premise that they knew how much their  product cost to 
produce.  In this context, "Retroactive" is a very onerous  word.
 
Nobody has mentioned this, but for some time, SoundExchange has accepted an  
additional fee to waive individual song reporting.  Inside our latest bill  
from them was a note that basically said: "By the way, retroactive to 2004,  you 
must report a two week sample of songs played during each  quarter.  Sorry, 
we took your money to waive the reporting, but we are  changing the rules after 
the fact."  That is going to be a huge burden for  anyone who has streamed 
their programming on the Internet.
 
Although I have sympathy for net casters, I think this is a even bigger  
burden for broadcasters who also stream.  You are already paying ASCAP, BMI  and 
SESAC for the use of the music.  You've also been paying Sound  Exchange.  To 
me, that sounds like paying twice for the same thing. 
 
You will note that a lot of radio stations stream their primary signal, and  
many new HD-2 channels are also currently available on the web. It is a  good 
way to attract listeners to HD-2, and it is a helpful service to lots  of your 
listeners who have trouble receiving your off the air signal in office  
buildings, or when they travel.    
 
Most stations think of their Internet streams as a "value added"  feature.  I 
doubt that very many actually make money out of it. We  sure don't.  If you 
look at Shoutcast statistics, you will see that most  stations have less than 
100 listeners on line. A really popular station might  have 500 listeners on 
average. Very few have over 1000 listeners at any given  time. It would be very 
hard to come up with a business model that could pay for  the new proposed 
royalties.  At 16 songs per hour for 500 listeners, that  works out to be around 
$76,000 for this year, and it will escalate to the  $100,000 range in a few 
years.  Unless you are selling crack cocaine on  your web site, it is going to 
be hard to make a profit from your web  stream.  Perhaps the mega-giants can 
afford to subsidize it, but the small  broadcaster will be forced off the 
Internet.
 
Is that what everyone really wants?
 
Chuck  Conrad
KZQX Radio
_www.kzqx.com_ (http://www.kzqx.com/)  
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