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Study Says $2.3B in Net Radio Royalties by '08

Posted by CowboyNeal on from the biding-their-time dept.

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."

6 of 102 comments (clear)

  1. Two things... by El+Cubano · · Score: 4, Insightful

    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.

  2. huh? by mastershake_phd · · Score: 5, Insightful

    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.
  3. Yea, I don't think so... by Anonymous Coward · · Score: 5, Insightful

    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.

  4. Good question by NetDanzr · · Score: 4, Insightful

    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.

    1. Re:Good question by Abcd1234 · · Score: 4, Insightful

      As it happens, this also further damages traditional media business models. Right now, with their control on distribution, the large media companies can use their clout to promote artists they believe are mass marketable. Internet Radio, on the other hand, fractures their market, because smaller (or worse, independant) artists may get more airplay. It also means their current payola schemes no longer work... how can you buy off thousands of internet radio stations running out of people's basements?

      In the end, the only people Internet Radio helps are the small artists and the music-listening public. Unfortunately, neither of these groups has much lobbying clout, and so we see ridiculous outcomes like this.

  5. Great returns! by Bobzibub · · Score: 4, Insightful

    $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.