Originally published at Customerservant.com. You can comment here or there.
I don’t mean to sound overly dramatic, but this is one of the saddest
periods of this whole mess.
You have people providing a service, innovating and bringing some spice
to an otherwise very dull industry, and it’s being squashed.
christmasmusic247.com. His site and hundreds of other free
Internet radio stations already have shut down. Most others say they
stop when the rates kick in Sunday.
“It really isn’t fair,” said Clark, who pulled the plug when he realized
could owe more than $20,000 in royalties if he continued.
The decision threatens the diversity that webcasters bring to an era of
large radio conglomerates and homogenized Top 40 playlists on many
over-the-air stations. Each month an estimated 72 million listeners tune
to thousands of Internet radio stations programmed by devotees of every
musical genre and subgenre.
Those stations often feature programming that’s like a party mix that
be shared with the world, including obscure and independent recordings
never heard on the FM or even satellite airwaves. “I can’t shoot up a
satellite, I can’t put up a tower,” Clark said. “It seems like you need
these niche broadcasters.”
Clark and other Internet radio providers stopped their music streams to
avoid racking up more obligations after the Copyright Royalty Board set
new rates March 2. Clark and others said they would resurrect their
stations if Congress or the courts halted the controversial hike, which
2010 will more than double the current rate of .0762 of a cent each time
song is played.
The royalty board also removed a provision that capped royalties for
Internet radio stations at 10% to 12% of their revenue. The higher rate
retroactive to the start of 2006, so webcasters also face large lump-sum
SoundExchange, the organization that collects and distributes Internet
music royalties, said the new rates were fair and necessary to
performers and record companies for the use of their music. Negotiations
are continuing between webcasters and SoundExchange, which has the
to strike separate deals.
In the meantime, the Internet is losing some of its musical variety.
Webcasters say the preemptive shutdowns are just a taste of what would
happen if the rate hike becomes permanent.
“I miss it,” said Glenn Wilcox, a manufacturing engineer and amateur
trumpet player in San Diego who started JazzPlayerRadio.com with three
friends in 2004. The station played nothing but trumpet jazz by legends
such as Maynard Ferguson and Bobby Shew as well as local artists, but
Wilcox and his friends stopped April 30 because of the pending royalty
“If I went to a show or a get-together of guys who are my heroes,
I’m part of JazzPlayerRadio, I could walk up to one of them, like Bobby
Shew, and shake their hand,” said Wilcox, 45. “He knew the station.”
Despite the thrill of having hundreds or even thousands of listeners
the world enjoying their favorite music, small webcasters have decided
higher costs make it a luxury they can’t afford.
Most Internet radio stations are free for listeners. Some large sites,
as Yahoo Music, run advertisements to help offset the costs, but most
people who operate small stations simply foot the bill.
“I pay for this out of my own back pocket,” said Dick Shuey, 68, of
Holladay, Tenn. He spends about $350 a month to run his country music
station, TwangTownUSA.com., but will stop Sunday because of the higher
Many hobbyists use services such as Live365.com or LoudCity.net to
broadcast their stations for a flat monthly fee as low as $9.95. Live365
has lost about 300 of its 10,000 stations since the royalty increase was
announced in April, said Johnie Floater, the site’s general manager of
media. And about 250 stations are starting each month, down from about
before the rate hike.
At LoudCity, the number of Internet stations has dropped from 550 to
500 even though the company, and not the broadcaster, is responsible for
royalty payments under its monthly service plans, which range from $35
$200, co-founder Brandon Casci said.
“They’re worried that somehow, someway, SoundExchange is going to come
after them,” Casci said.
Clark started his Christmas-music station because he had always loved
genre and enjoyed working at his college radio station. He built his
collection by scooping up CDs at after-Christmas sales. His playlist
totaled 2,959 songs from the likes of Peabo Bryson, Bing Crosby, Garth
Brooks and the Brady Bunch.
Interest in his station built throughout the year, from about 10 to 20
listeners in January to big spikes after Labor Day and Halloween. In
December, he averaged 625 listeners during the workday, with many people
listening in their offices. Fan e-mail has arrived from as far away as
Japan and Africa.
But after doing the math, he decided he couldn’t survive under the new
Clark offset his costs last year with $1,076 from advertising and
contributions. Under the higher royalty rate, Clark estimated he owed
$7,471 for 2006.
Based on feedback from listeners, he had started a second station on his
site this year devoted to instrumental Christmas music. By his
calculations, he would owe $13,410 for both stations this year.
“That’s a car payment or the second mortgage,” Clark said. “That’s just