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AG News: 6/13/2007

Internet Radio Makes Noise With Day of Silence

You may not hear the Day of Silence creeping up until it pounces on Tuesday, June 26.

You also may not believe there is much to be gained from having a day when most webcasters kill their streams. But, as protests go, this had better work. The Copyright Royalty Board's move to award so much in royalty rates for the right to play music online threatens the online radio industry's existence. To fail means that come July 15 you'll have far fewer interent radio stations.

If you're stuck in that broadcast arena, you will pay the amounts required by the new CRB rates if you stream your station's signal. And, simply shrugging your shoulders as the Day of Silence rolls by is going to set you up for similarly explosive royalty rates on the broadcast side. The RIAA-backed MusicFirst Coalition has already made that clear.

Despite this, broadcasters seem ambivalent to the new online royalty rates. Scanning Radio & Records and Radio Ink archives reveals no stories - June 1 to present - about how these new online rates will affect broadcasters. Industry leaders have only come out in the last few days to acknowledge the RIAA-backed MusicFirst Coalition's "performance" rate proposal as a "tax." (This is the same style of rate increase, but it's applied to over-the-air broadcasts.)

If radio doesn't ratchet up lobbying power concerning the online royalty rates, thousands of broadcast radio stations' streams will go silent. Then, over-the-air programming better look out.

If these royalty rates stand, there's a very good chance the online station you listen to will fold. Back payments, due through Jan. 2006, will force thousands of internet stations to give SoundExchange more money than they currently have. The word "bankruptcy" has cropped up many times over this fact, just about as many times as the phrase, "We'll just turn off our streams and walk away."

Here's the gist of what's happening, according to Kurt Hanson at RAIN: "...the rates set by the CRB judges equate to roughly 50% of revenues for large webcasters like Yahoo! LAUNCHcast (and probably many terrestrial station streamers), 150% to 300% of revenues for small webcasters like AccuRadio, Radioio, and Digitally Imported, and, for webcasters with large numbers of channels like Rhapsody and Pandora, well more than 1,000% of revenues."

I'd like to hear the discussion in a college finance course about the above increases. I'd be happy to supply a discourse with facts concerning the lack of revenue in the online radio world (how advertisers are few, and agencies aren't interested yet).

The Day of Silence is Tuesday, June 26. Spread the word that unreasonably high royalty rates are going to crush the online radio industry; do this whether you're a webcaster, broadcaster, or audience member.

Call your Congressman and Senators. You can find their phone numbers at Tell them to support their version of the "Internet Radio Equality Act." Then call a friend and have them call Washington, too.

You may not hear the Day of Silence creeping up on June 26, but then you won't be hearing many internet radio stations on July 15 either if people fail to make their voices heard today.

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President, Audio Graphics
Ken Dardis
Online Since January 1997

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