I really miss BBM radio today!
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/06/26/MNGMDQLP6G1.DTL&hw=radio&sn=002&sc=969Tiny Web radio stations squawk over royalty fees
Peter Hartlaub, Chronicle Pop Culture Critic
Tuesday, June 26, 2007
Internet radio DJs are replacing their eclectic playlists with a "Day of Silence" today, a protest against new royalty rates they say could decimate the fledgling digital broadcasting industry.
Earlier this year, a congressionally appointed three-judge panel drastically increased the royalty fees the stations must pay for music streamed over the Internet. Critics say the rates, which would be retroactive to 2006, will make it impossible for small stations, public broadcasters and specialty startups that cater to the industry to stay in business. The new rates are scheduled to go into effect July 15.
"For us, the royalties went from $20,000 to $600,000 per year," said Rusty Hodge, whose 11-channel SomaFM Web site was launched in 2000 and operates in San Francisco's Mission District. "That's about three times the total income we made in 2006. We're not getting rich off of this."
The move would have a particularly strong impact on the Bay Area, and not just because of the region's large number of local DJs who broadcast Internet radio shows to a handful of fans. Live365 Inc., which claims to be the world's largest Internet radio network with thousands of stations and 4 million listeners per month, is based in Foster City. Pandora.com, a rapidly expanding service that lets users create radio stations that cater to their likes, was founded in San Francisco.
Today's protest comes after a decision in March by the Copyright Royalty Board, which ruled that starting July 15, Internet radio stations will be charged based on the number of their listeners. Previously, the stations paid a percentage of their revenue. Internet radio providers are governed by different rules than traditional radio stations.
The "Day of Silence" was created in support of the proposed Internet Radio Equality Act, which was introduced in Congress in May. If passed, the bill would overturn the royalty board's decision and restore rates as a flat percentage of revenues.
The royalty board's decision was hailed by SoundExchange, a music industry organization that says the new system is better for performing artists, who weren't fairly compensated under the old system. After Internet broadcasters protested, SoundExchange said it is trying to negotiate a compromise with representatives of smaller broadcasters that would give them a break.
"It's pretty much a moot point," said SoundExchange spokesman Richard Ades. "SoundExchange has made an offer to small Webcasters to give them pretty much the same (rate) that they had before."
But the battle lines still haven't moved. The Internet broadcasters say any discount would only protect them temporarily and that the "small broadcaster" definition would set revenue caps that would punish success. It has become common to find Internet radio sites embedded with form e-mails that are pre-addressed to local congressional representatives.
SomaFM is a midlevel player, with about 500,000 unique listeners per month. Music adventurists who tuned into SomaFM on Monday might have heard Lunatic Asylum, Not Your Average Hippy and 100 other bands that aren't getting much airplay on commercial radio. One of the stations is called Secret Agent, composed entirely of theme music for the 21st century spy.
The royalty battle has created some strange allies -- larger Internet-based companies such as Time Warner have sided with the Internet radio DJs, many of whom are broadcasting out of their bedrooms.
Ted Leibowitz is the poster child for the latter category, turning San Francisco indie rock Internet station BAGeL Radio from something to entertain a few of his friends into a station with 40,000 listeners per month and an international following. (He still runs it from the spare room of his Richmond District apartment.)
Leibowitz said his site is artist-friendly, populated by listeners who are looking for new sounds and are likely to buy an album or attend a show. His point is proved two minutes into an interview, when he's interrupted by a local band member knocking on his door to drop off some new music in hopes of airplay.
If the royalty board's decision stands, Leibowitz says it will do a huge disservice to artists and listeners.
"Let's say right now you have cable in your house with 125 channels, and then the cable suddenly goes out, and all you have left is the networks that you can get with rabbit ears," Leibowitz said. "It will look like that, except 100 times the scale."
While the Internet DJs try to get the word out, SoundExchange is mounting its own campaign, trying to rally artists and filling its site with news stories with headlines such as May 11's "Recording Artists Outraged at Money Grab by Corporate Webcasters" -- with quotes from the national director of the Recording Artists' Coalition.
The Internet radio hosts are determined to get their say as well. The "Day of Silence" will be anything but, because most of the stations will broadcast public service announcements and other programming to explain their side of the argument. Hodge and another SomaFM disc jockey spent much of Friday recording spots that focus on the controversy.
"We went down to BART and recorded some sounds, just to give a San Francisco air to what we're doing," he said.
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What is Internet radio?
Internet radio broadcasts, often called Webcasts, are received through a computer, not a standard radio. DJs set up Web sites and devise their own playlists, which are broadcast over the Internet and sound like regular stations -- in most cases minus commercial breaks and mainstream playlists. The first Internet radio stations emerged in the mid-1990s.
E-mail Peter Hartlaub at
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This article appeared on page A - 1 of the San Francisco Chronicle
