Doom and Gloom for Web Radio

DailyTech posted interviews with the founder of Pandora and management from Proton Radio (and Proton Music) asking them what SoundExchange's latest rulings mean to them. A lot of net radio stations are dreading the upcoming changes in royalty rates, which are said to be around 400%... a number that would bankrupt most of the industry. An interesting read for anyone who uses online radio.

Comments

Everyone sing with me:

[ducomputergeek]

Royalties kill the internet radio star....

begs the question

[bit trollent]

What do nerd libertarians that listen to internet radio think about this?

Re:Meh...

[ContractualObligatio]

In terms of choosing tracks you like, you have a strong argument.

However, if your approach to life is that predictable gets boring, or you like the idea of hearing things you've never heard before, then you can see how the "best mix" for some of us cannot be comprised only of artists we already know.

But there's also the question of what you're in the mood for. I like having the choice of radio vs. my own collection. If I'm in the mood for my own selection, I've got it. If I want to hear new stuff, there's the radio. And with both a wide selection of stations and services using predictive algorithms to select tracks I might like, I have a lot of control over the degree of randomness in the mix of music I get from the radio.

It's that mix of my music vs. radio that's the important thing for me - I confess it's a small part of my listening time is to internet radio. But a small percentage across millions of potential audience members is enough to justify the internet radio stations. Unless royalties are raised so high it puts them out of business.

The point of most markets (and commercial arrangements) is to find a price suitable to both parties. Pricing internet stations out of the game, when they could otherwise provide a useful service to a niche market, is an abuse of power. It's a bad thing.

It's all about the DRM folks

[ObjetDart]

Once you understand that, everything SoundExchange is doing makes sense. These seemingly counter-productive actions by SoundExchange lead to a lot of head scratching by a lot of people. Why would the music industry want to kill such a seemingly obvious way to generate more music sales? Etc.

The RIAA has been trying for years, without success, to pass legislation to require all internet radio broadcasters to use DRM in their streams. In practice this means only one thing: they desperately want to make it illegal to broadcast internet radio in mp3 format.

The RIAA has got in their heads that the combination of DRM-free readio broadcasts in mp3 format with tools such as StreamRipper is leading to rampant music piracy. I have no idea how rampant the piracy actually is, but it could be bad at least in theory. The problem is that it is possible, with relatively little technical know how, to point a tool like StreamRipper at, just for example, one of the many fine music 128k music channels available at somafm.com, leave it running, and come back a day or 2 later to a directory containing gigabytes of free MP3 music.

Anyway, since they have not been able to make mp3 broadcasting illegal, SoundExchange's behavior is simply the RIAA attacking the "problem" from a new front. They want to shut web broadcasters down. They know the new rates are way too high! That's the whole point. They want to bankrupt all the broadcasters who are streaming near-CD-quality mp3s out to the world for free.