The Precarious State of Internet Radio

Some updates on the Internet Radio situation:

Pandora Founder Appeals in Last-ditch Effort to Save “Internet Radio”

From Tim Westergren, founder of Pandora:

Hi, it’s Tim from Pandora,
I’m writing today to ask for your help. The survival of Pandora and all of Internet radio is in jeopardy because of a recent decision by the Copyright Royalty Board in Washington, DC to almost triple the licensing fees for Internet radio sites like Pandora. The new royalty rates are irrationally high, more than four times what satellite radio pays, and broadcast radio doesn’t pay these at all. Left unchanged, these new royalties will kill every Internet radio site, including Pandora.

The proposed exorbitant licensing fees specifically targeting Internet streaming/radio will severely hamper many innovative, up-and-coming startups and services. Webcasters large (AOL, Yahoo, NPR) and small (such as Pandora), who had been hoping to appeal the original rulings had their hopes dashed when the Copyright Royalty Board denied their appeals. (Copy of the ruling. [PDF] )

More on the proposed rates here.

At this point, only Congressional action will save most of these services from a quick financial death—petition your Representatives here.

Legislation to correct the situation was intoduced last week, and somebody doesn’t like it.

A congressional push to overturn controversial increases in fees for Internet radio operators came under attack on Friday by SoundExchange, the organization that collects royalty payments on behalf of musicians.

Some additional articles:

Copyright Royalty Board Denies Rehearing Motions—Next Stop, Court of Appeals
Net Radio Operators Lose Appeal Over Fees.
The Death of Web Radio?

Via Copyfight:

for quite a while, digital (Web) radio has had to pay significantly higher performance royalty rates than analog broadcast services. In effect, analog radio gets for free what Web radio pays through the nose to stream. That has hampered the growth of the industry and stifled any number of free, independent and likely new creative Web radio initiatives.