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Wednesday, 1 May, 2002, 12:43 GMT 13:43 UK
Web radio's silent protest
Radio simulcast
Some traditional broadcasters are showing sympathy
American web radio stations are going off-air in protest against what they say are excessive royalties for the use of music on the internet.

Hundreds of stations could be involved as owners protest levels of royalties could bankrupt the whole industry.

They are opposing rates recommended in February by a Copyright Arbitration Royalty Panel working for the US Copyright Office.

The proposed fees would definitely put us out of business

Bill Goldsmith
The Librarian of the US Congress is required to set royalty rates by 21 May.

The panel recommended webcasters pay record companies a rate of 14/100ths of a cent (1/10th of a penny) per listener per song.

While it appears small, webcasters say it could represent up to 200% or more of sales, threatening their business.

"The proposed fees would definitely put us out of business," said Bill Goldsmith, the owner of rock station RadioParadise.

Representatives protest

Kurt Hanson, publisher of Radio and Internet Newsletter, said the proposed fee would amount to about $9,000 (6,200) a month for any medium-sized webcaster, double their revenues.

This week, 20 members of the House of Representatives sent a letter to the Librarian of Congress, saying the proposal could stifle innovation on the internet.

Many webcasters are planning to remain silent for the whole of Wednesday.

We've unfortunately gotten too used to the idea of giving music away for free

John Simpson
Others plan to replace music streams with periods of silence interspersed with announcements on the subject.

The Recording Industry Association of America (RIAA), which represents major labels had pressed for even higher rates.

John Simpson, executive director of RIAA affiliate SoundExchange, which collects licensing fees, said he is pleased with the proposed rates.

"The most important component of their business is music and webcasters don't want to pay for it.

"We've unfortunately gotten too used to the idea of giving music away for free," he said.

Pirate services

"I think it's kind of interesting that we haven't seen the webcasters launch a day of silence to protest against bandwidth costs."

Webcasters maintain if they go out of business, more pirate services will flourish in their absence.

Several major traditional broadcasters, who stream "simulcasts" on the internet, also plan to support the effort.

Silenced streams or and other protests will be used, according to Hanson.

Traditional radio stations pay no performance royalties for music played on air because they are said to have proven promotional value.

These operators would only be required to pay half or 7/100ths of a cent for music they streamed on the internet simultaneously with their radio stations, according to the panel's proposal.

In the UK webcasters either pay as a percentage of revenue or flat rate, depending on an individual review by the Performing Rights Society.

See also:

18 Dec 01 | New Media
Deal over web radio royalties
11 Nov 01 | New Media
Musicians win web royalties fight
31 Jul 01 | New Media
Negotiators join web royalty row
12 Apr 01 | New Media
Internet radio faces royalty row
10 Dec 01 | New Media
Napster's next step in court
04 Dec 01 | New Media
MusicNet launches battle for fans
11 Dec 01 | New Media
Pressplay users can 'burn' CDs
22 Mar 01 | TV and Radio
Internet broadcasting's brief history
22 Mar 01 | TV and Radio
Internet broadcasting's fuzzy future?
11 May 00 | UK
Net boosts radio figures
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