If you spend a lot of time on line you have no doubt listened to “online radio” in one form or another. This Tuesday, June 26, 2007 you’ll have to go back to listening to your MP3s. Tuesday is being dubbed the “Day of Silence”. This is a protest against the record industry’s new “administrative fee” which is to be administrated on every channel a webcaster broadcasts. “Attorneys for the webcasters thought this was such a patently ludicrous idea that they didn’t even bother to respond to it.” (from Business 2.0: see link below). Lack of response may prove to be a huge mistake for the industry.
Let’s look at some numbers. A channel for internet radio is a bit different than traditional radio. For example you can go to many of the big webcasters, like Pandora, or RealNetworks’ Rhapsody and choose your favorite 5 artists and set up your own channel that only plays your 5 artists. You just cost Pandora $500. Now multiply that by everyone using their service and if they set up multiply lists/channels. That’s a lot of money. “Internet radio stations frantically crunched the numbers: it appears that Yahoo, Pandora, and RealNetworks will have to spend $1.15 billion per year on the administrative fee alone.” (business 2.0: see link below) A bit absurd don’t you think?
I believe this is only affecting webcasters from the USA, but it is yet another way that the record industry is trying to recoup money for it’s ailing profits. They argue that it fees that should be paid to the artists. The internet radio industry argues that they should have the same rules as the satellite radio industry, which pays something around 7% of total revenue to royalty fees. Otherwise it will destroy internet radio.
Hopefully, the “Day of Silence” will have the affect that it is intended to have: To get the recording industry to rethink their tactics for royalty fees. The internet radio industry is also encouraging people to contact their reps and politicians in regards to the issue. The Day of Silence on June 26th
Reference: Future Boy: Internet radio sites to protest new fees – Jun. 22, 2007
