The last days of Internet radio?

by Lee Simmons, June 5th, 2007, 7:00 am

I am one of the many consumers of Internet radio, a godsend to the computer-bound worker. Internet radio has introduced me to countless new musical artists over the past few years and provides a constant and exhilarating soundtrack to my workday. Stations like KUT (Austin) and KCRW (Los Angeles) are among the hundreds of stations around the country that deliver music to online listeners free of charge.

Those days might soon be a memory, though. Earlier this year the Copyright Royalty Board voted to increase royalty rates that digital radio operators pay to SoundExchange, an artists’ rights group representing copyright owners. The ruling means broadcasters like KUT and KCRW, both of which subsist heavily on listener donations, will have to pay a per-song fee beginning July 15. That translates to 7/100 of a cent for every listener to every song dating back to January 1, 2006, and the cost is expected to triple by 2010.

It’s no great mystery what will happen if the ruling is left as is. Internet broadcasters around the country will close up shop in lieu of paying the new rates (except, perhaps, for corporate-backed providers like AOL Radio). Luckily, enough people are criticizing the proposal to pique Congress’ interest. Both the House and Senate have introduced bills aimed at halting the rate increase while seeking a more achievable flat royalty fee.

Do artists deserve to be paid for their art? Absolutely. But it’s pretty clear to me and others that if the ruling stands, those artists who need the dough most probably won’t get their music played anyway. That’s the beauty of Internet radio today — obscure artists have an efficient and direct marketing channel straight into the headphones of thousands of listeners and potential music buyers every single day.