Internet Radio Royalty Rate - the FAQ

The Wunderkinden over at Digital Music News have posted an excellent (if pedantic) FAQ about the proposed royalty rate changes for streaming Internet radio. It gives you a pretty good idea how very complex this whole issue is. This debate is also a good trial run on how a consumer compulsory licensing scheme might play out in the near future.

Read the FAQ here.

For the record, I am not per se against raising rates across the board - including Public Broadcasting. Music has real value and society ought to pay money to get that value if they choose to consume music. Raising royalty costs will ultimately shift the burden to advertisers, where it belongs. We are about to see an explosion in streaming advertising (so-call “pre and post roll” ad insertion). YouTube will lead the charge on this as they complete their court settlements with major content owners. Once they turn on the advert switch en mass, this sort of ad buy will become as ubiquitous as banner ads and TV commercials. As a lover of music, I would just assume get more money flowing towards licenses now rather than later.

The Public Broadcasting issue is indeed troubling. It does seem like they should catch some sort of break here. In my opinion this break should not come at charging them less than others, but by providing private and public subsidies to counteract the hike. Truth is this sort of Internet streaming model will soon become the primary means by which the Public Broadcasting audience consumes their content- so they need to reconcile their responsibility to bring fresh ideas to the people while empowering the technology to produce dollars to keep musicians economically viable. Note also that the hike only applies to music played via Public Broadcasting - not original spoken-word based content.

Monday, July 16th, 2007 Music Business