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Monday, March 05, 2007

I have to admit to being somewhat "out of the loop" up to now; as nothing seemed to work properly on my old Windows 98SE set-up, I haven't been listening to Internet radio for several months. But I've just installed Win XP Pro SP2 (on my new Core 2 Duo system, thank you), and I've just put up WinAmp 5.33. Of course, the first thing I wanted to listen to is Radio Paradise.

Well, just in time, it seems, as I find Internet radio (the only "radio" I ever listen to) is under attack from the feds. A quick check around the blogosphere shows that my friend, Radar, at The Daily Brief, is already all over this. But it seems my good friend, Eugene Volokh, is silent on the matter. This is important to me because, like me, he is a "pragmatic libertarian," who recognizes the value of the regulatory state. But is is much more able to express his argument in legalese.

All that said, this becomes a matter of economics. And, as Radio Paradise's Bob Goldsmith puts it, this will simply put Internet radio out of business. The math, as worked out by Kurt Hanson, of Radio And Internet Newsletter (RAIN), is laid out here, by ConsumerAffairs.com's Martin H. Bosworth:
The CRB's new royalty structure begins at $.0008 per performance, retroactive to January of 2006. While that may not seem like a lot at first, the CRB decision defines "per performance" for Web radio as streaming one song to one listener.

Kurt Hanson, writing for his Radio And Internet Newsletter (RAIN), calculated that an average Web radio station that plays 16 songs per hour would owe 1.28 cents per listener per hour. And the more listeners per hour, the more royalty fees the station would have to pay, "in the ballpark of 100% or more of total revenues," according to Hanson.

The rates would continue to increase each year. In 2007, Web broacasters would owe $.0011, $.0014 in 2008, $.0018 in 2009, and $.0019 in 2010. Those royalty fees only cover the actual broadcast of the songs to listeners -- the station owners would also have to pay royalties to the performers as well.

The owners of SaveNetRadio.org claimed that a royalty fee of $.0011 would tally up to "about 1.76c per hour, per listener. A station with [an average of 500 listeners] would be hit with fees of $211 per day, $6,336 a month or $76,000 a year."

Obviously, this establishes an uneven playing field between Internet and broadcast radio. One might argue that "the difference in technology already establishes an uneven playing field." But that is the nature of the free market - that is what drives technological advancement. This regulation is, by it's very nature, Luddite.

Now, it is incumbent upon all of us to spread the word, and call our congresspeople, and put a stop to this.

Update - Here's the email I've just sent to my congressman, Dana Rohrabacher. I will be sending something similar to my senators shortly:

I want to go on record as adamantly opposed to the recent U.S. Copyright Royalty Board decision on fees paid by Internet music content providers. The small capital investment required for start-up of one of these operations has yielded a rich landscape of programming, which simply isn't available through terrestrial or satellite broadcasters. It is vitally important that this nascent industry be protected.

Please inform me of precisely where Congressman Rohrabacher stands on this issue, and what actions he plans pursuant to it.

Thank You
Kevin L. Connors
Westminster, CA
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A blog dedicated to the personal musings of Kevin L. Connors - a pragmatic libertarian, engineer, businessman, and journalist.

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