Internet Radio Saved….for now.
Posted by jamesfrankel on July 9th, 2009
In a deal announced this week between the Copyright Royalty Board (CRB) and a group of webcasters, Internet Radio Stations such as Pandora and Blip.fm will be able to remain on the “air” for the time being with a tentative agreement for lower royalty rates than were originally proposed by the CRB. The original proposed royalty rates were as high as .19 cents/song to be charged retroactively to 2006 which would most certainly have silenced most internet radio stations. The new rates that have been tentatively agreed upon follow a staggered implementation schedule - beginning at .08 cents/song to be implemented retroactively to 2006 up to an eventual .14 cents/song in 2015. There are a few problems with this - as most Internet radio stations do not currently charge customers - therefore generating little (if any) revenue. Pandora has stated that they will most likely begin charging a monthly fee to those customers who use the site the most (those who listen to over 40 hours of music per month). This will most likely not sit very well with avid listeners (like myself) - many of whom will shift over to sites such as imeem to avoid paying for content that many consider free advertising for the musicians. For example, most radio stations include purchase buttons next to the tunes being played that allow you to buy the song from a site such as iTunes or Amazon. Some now include commercials between the songs. Additionally, most radio sites do not allow you to choose the exact song you’d like to listen to, just choose an artist. Paying for a service that does not give you ultimate control over what you listen to probably won’t be a viable business model either.
For now, Internet radio will continue, but for how much longer no one can actually say. I personally believe that it is a service that should stay around. I use it all the time. As an educational tool it can be invaluable. Rather than sending students somewhere to steal music that you’d like them to listen to, you can refer them to a radio station like Pandora so that they can hear music legally. It would be a shame to have this disappear.
What do you think? Should Internet radio stations be allowed to play music without paying royalties? Why should terrestrial radio be permitted to pay far less expensive licensing fees than online radio? What would be a fairer system?
I welcome your comments and questions.
July 15th, 2009 at 8:35 pm
I find this to be bittersweet news. I love Pandora, but that isn’t the only reason I am starting to feel nervous while reading your post. This is one of the primary ways I am exposed to new music. Does it seem like it is getting harder and harder to find new and interesting artists? I don’t want to have to download an album before I know if I like it. Even worse, I don’t want to be totally dependent on the labels to pick out music for me. Internet radio is a great way to explore genres and it has allowed me to only buy the stuff I love. Stick it out Pandora! Fight the good fight.