Well, it was nice while it lasted. The streaming music industry, which had done so much to expose people to new artists, will likely shrink in a big and sad way after a U.S. judge rejected complaints that new Webcasting royalty rates were too high. This means Webcasters must file an appeal with the Appeals Court and Congress if they want these RIAA-supported rules to change.
So what can Webcasters do to stay in business other than coughing up more dough? Maybe they should move to Canada where we don’t have hard and fast rules yet when it comes to slapping industry–killing royalty rates on an emerging industry. In a recent Toronto Star column, Michael Geist, Canada Research Chair of Internet and E-commerce Law at the University of Ottawa contends there may be a way for Webcasters to work within the rules to operate fairly inexpensively in Canada or, at least, with lower financial burdens than in the U.S.
Of course, this entire royalty issue is preposterous because it’s yet another example of how the music industry is happy to cut off its nose to spite its face. The industry is so obsessed with getting its money that it’s forgot that giving consumers discovery tools is the way to encourage people to buy more music. If you take away these discovery tools, you’re forcing them to rely on the Clear Channels of the world, which is like eating tofu when you want steak.
For more, check out Beta News, which offers up more details about the decision and how much Webcasters will have to pay, and Olga Kharif, who asks “The Death of Web Radio?”.
Update: If you interested in saving Internet radio, check out this petition.
One Comment
From my humble point of view the music industry deosn’t like discovery tools since it allows the “consumer” to bypass their marketing campaigns that work hand in hand with traditional media such as radio and television.