Idiots killed the radio stars

The Doomsday Clock for Web radio stations has edged closer to midnight. On Monday, a panel of copyright judges threw out requests to reconsider a ruling that will drastically increase the royalties webcasters must pay to record companies and artists. A broad group of public and private broadcasters, as well as Yahoo and AOL, had sought a review of the March 2 ruling, saying the new royalty rate will drive many webcasters out of business. The appeals process awaits, but in the meantime, barring intervention by Congress (as happened in the last such negotiations), May 15 remains the deadline to pay up. The copyright panel did give webcasters permission for the rest of the year to calculate fees by average listening hours, as they had been, but then the new system, in which a royalty is charged each time every song is heard by an online listener, kicks in.

One clarification made by the Copyright Royalty Board, however, could draw some bigger dogs into the fight. The panel said the new rates apply not only to Web-based radio stations, but also to any company that broadcasts music over cellular networks. Writes BusinessWeek’s Olga Kharif, “Now that the CRB decision affects not just the little guys – Webcasters – but also some of the telecom world’s giants. That makes me more sure than ever that Congress will have to get involved before the decision goes into effect May 15.”

Let’s hope so, because it’s clear the music industry can’t even be trusted to look after its own best interests, much less those of listeners. As Mike at Techdirt notes, “The end result, of course, is actually going to hurt the music industry greatly. Webcasting has always been a huge promotional driver for artists — especially niche artists who wouldn’t get any publicity any other way. The recording industry apparently still hasn’t figured out that it can expand its market by letting people promote the content for it.”

[Source: Good Morning Silicon Valley, Cal, 17Apr07]

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