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Study Says $2.3B in Net Radio Royalties by '08
An anonymous reader writes "According to a newly published report, the music industry will have a nice pile of cash to collect from net radio owners in 2008 — a staggering $2.3 billion to be exact. The report is based on current performance royalties paid by terrestrial radio vs. internet radio, and taking into account projected growth in listenership. Meanwhile, the corporate Clear Channels pay just $550 Million for broadcasting the same songs we've all heard before. Hardly a fair deal."
According to a newly published report, the music industry will have a nice pile of cash to collect from net radio owners in 2008 -- a staggering $2.3 billion to be exact. The report is based on current performance royalties paid by terrestrial radio vs. internet radio, and taking into account projected growth in listenership.
First, this assumes that everyone will pay the new fees instead of finding alternative unlicensed content (that is free or Creative Commons or other similar content).
Meanwhile, the corporate Clear Channels pay just $550 Million for broadcasting the same songs we've all heard before. Hardly a fair deal.
Second, it is fair. It is called economies of scale. Clear Channel deals is huge quantities. To put it another way, if you go to a local corner market and buy a pack of four rolls of toilet paper for $2.00, then you go to Costco and see the same brand of toilet paper in a box of 40 for $10.00, is that unfair? No, it is called purchasing in bulk. Same as the sort of thing that MS does with corporate VLKs versus regular retail prices.
Are they trying to make money or shut down internet radio? I was under the impression that most internet radio stations were run for fun, not profit.
Libertarian Leaning Political Discussion Forum.
That projected growth is on the tacit assumption that folks will pay more for the same product -- and they won't, The broadcasters will either raise fees or shut down entirely. Either way listenership goes down.
There seems to be the gross assumption that Internet radio is insanely profitable. While it certainly enables small producers an outlet for their work vs conventional broadcasting, they still tend to have small audiences with niche markets.
RIAA just needs to keep pushing until all we listen to is pirated, ripped MP3s all day, everyday.
And the answer is that they are trying to shut down Internet radio. Consider this: currently, you can connect to the Internet almost anywhere with certain data packages from cell phone carriers. Soon, in major metro areas you'll be able to do the same via municipal WiFi or mesh networking. Some people have been streaming Internet ratio in their cars for years, so fully Internet-enabled car stereos can't be far behind. This is a situation that gives Clear Channel and other large radio companies nightmares: the ability of people to choose from thousands of commercials-free radio stations instead of being stuck with the same selection of ten traditional stations.
That's the worst possible word to describe what is simply IP radio. What does it even mean? That the radio travels over lines that are on the ground? And what happens when it goes through the millions of wireless broadcast points and everyone can access it like it was...radio?
Radio is radio. The idea that they should be taxed differently is absurd. Even more absurd is the idea that IP radio be taxed more than normal radio because normal radio can be freely recorded and digitized by anyone within the broadcast radius, whereas to get IP radio you have to be paying for internet access (most of the time).
TLF
I do not respond to cowards. Especially anonymous ones.
$2.3B per year on a $23m investment in bribing congress (http://opensecrets.org/industries/indus.asp?Ind=B 02) is:
($2,300,000,000 / $22,699,424) *100%= 10,132% return. = Damn near priceless.
Now RIAA members *could* invest in modernizing their legacy business model, but their current one is clearly much more lucrative.
You nailed this sentiment.
It seems as though some of the individuals involved here (typical of government bureaucrats BTW) don't have the first idea of basic economic theory:
If you raise the price of something, the demand goes down. How simple can you get here?
There are some product like gasoline which in the short term doesn't display this tendancy, although even the oil companies have been required to adjust to fuel efficient vehicles, where even state taxation authorities have realized that highly fuel efficient vehicles don't pay nearly the same fuel taxes that gasoline hogs once did... proportional to the number of miles those vehicles actually drove.
In the case of a pure luxury consumer product like music, this sort of economic theory is much more apparent. For music performers who perform live concerts, they have known this for decades and for the most part have astronomical ticket prices because their arenas and other places they perform at are limited in size. They can get away with the high prices because it is expensive to build larger arenas or performing halls. Cutting their audience size to 1% of those who might be willing to attend if the ticket prices were more reasonable wouldn't make a difference if they can still fill a 100,000 seat arena with that 1%.
For internet radio, the number game is something that plays out significantly different. First of all, most people who are hard fans of musical performances have been used to obtaining "free" music over the internet, even if they subseqently purchase the same music on a CD afterward. That is the key point, that much of what is done on the internet is a form of advertising.
While I have no doubt there is some way that music studios can "maximize profit" here in terms of royalties for these internet music rebroadcast sites, the amount of money to be made is going to be even at best far less than this $2 billion that is being claimed. The money simply isn't there. And even if it were, how much of this is going to be coming from other revenue sources that the music industry currently is already taking. If you spend it on a subscription to an internet radio station, are you going to purchase the CD, or go to a concert with the same money? I don't think so. It has already been spent.