Will Internet Radio Die?
by Timothy Everingham, NOCCC - July 08, 2002 at 17:50:49:
With the recent CARP (federal government copyright arbitration panel made up of nongovernmental lawyers) decision that would cost Internet radio broadcasters to pay royalties on a cost per stream (listener) basis and have large costly reporting requirements, it looked like Internet radio was dead. Since the ruling would have caused Internet radio broadcasters to pay years of back royalties, it would have bankrupted them too. This was even though many of them had been paying the same music licensing fees that regular radio stations had been paying. The Internet radio community felt that the major record companies had maneuvered to trick the arbitration panel into making a decision to kill Internet radio because the major record companies considered Internet radio as something they could not control or influence as well as the regular radio and played a lot of music from small record labels and independents. To do away with Internet radio would eliminate a good source of promoting the major record companies’ competitors’ products. With little time to try to overturn the ruling of the arbitration board and no one with enough clout to stand by the Internet radio broadcasters to do it, a depression fell upon the Internet radio community; thinking it was just a mater of time before Internet radio would die.However, something unexpected happened. On April 8 the President of the National Association of Broadcasters, Edward Fritts, in his opening address to the Association’s Convention in Las Vegas embraced the Internet radio broadcasters as part of their own, came out strongly against the CARP arbitration panels ruling, and said the National Association of Broadcasters would use its resources to fully fight this rulings implementation. A white knight had stepped forward to defend Internet radio and hope again returned to the community. Internet radio now had its champion, and now it had a fighting chance to survive.
At Spring Internet World/Streaming Media West Conference in Los Angeles on April 24 a panel on the Internet radio regulatory issues, especially the CARP arbitration board ruling, occurred. The panel was made up of representatives from both Internet radio and the major record companies. Both sides opened with saying that both the CARP arbitration board’s decision and the way the board went about it was ridiculous. They even went as far as insinuating the board was possibly incompetent and that in both sides briefs to the arbitration board there was a basis of a good settlement for both sides. Then both sides started signaling the other on what they felt would be a good basis of agreement. What then proceeded looked like actual negotiations of a settlement during the rest of the panel session. Both said they needed to settle this on a basis of percentage of revenue rather than a cost per stream. Comments back and forth to each other developed into an outline a possible settlement agreeable to both parties on this issue. On the reporting requirements. the Internet radio people said the proposed reporting requirements could cost more than the royalties, most of the information the record companies do not need, and was something they could not live with. The record companies came back and said that they agreed with the Internet radio people that they did not need a significant portion of the data, but needed some additional information that they have not been getting from the Internet radio stations. Again the discussion went back and forth between the two sides and created an outline of a possible settlement agreeable to both parties. There was even talk of having amateur licensing for noncommercial use where no royalties would have to be paid and minimal reporting requirements that both sides seemed to want. The session ended with the impression that an outline for a settlement agreeable to both parties to replace the CARP arbitration ruling had been created, and the resulting agreement would save Internet radio.
The battle is not over for Internet radio’s survival. The CARP ruling is still there and the final agreement between Internet radio broadcasters and the record companies has not been finalized. However, it seems that an agreement will soon be reached that will save Internet radio.
Timothy Everingham
He is CEO of Timothy Everingham Consulting in Azusa, California. He is also the member of the Executive Council of the Los Angeles Chapter of SIGGRAPH, the largest chapter of the Association for Computing Machinery’s(ACM) Special Interest Group on Computer Graphics and Interactive Techniques and one of Southern California’s significant professional organizations within the entertainment and media industries. He is also on the Management Information Systems Program Advisory Board of California State University, Fullerton; which he also graduated from with honors with the double majors of Management Information Systems and Accounting. In addition he is the Vice President of the Windows Media Users Group of Los Angeles. He is also part-time press in the areas of high technology, video, audio, and entertainment/media and has had articles published throughout the United States and Canada. He is a member of North Orange County Computer Club.
Further information can be found at http://home.earthlink.net/~teveringham
Site Disclaimer Suggestions? E-Mail to webmaster@noccc.org