Internet Radio on Life Support?

Is so-called "Internet Radio" on life-support? It seems that unless a new bi-partisan bill introduced in congress, the Internet Radio Equality Act from Jay Inslee (D) and Donald Manzullo (R), is passed by July 15th... well, a great many outstanding Internet music sites will quickly go bankrupt and be out of business. Most notably for me would be the harm this could cause Pandora, a service I have quickly grown to love, as my recent blog posting described.

See this article, and this one, and this one for info on the situation. More recently than any of these it was announced that the feared May 15th deadline was actually a July 15th deadline, so that gives the SaveNetRadio.org group and others time to fight to get the new bill passed. Doing so would essentially cancel the decision of the federal Copyright Royalty Board, which had determined to hike up fees for web streaming radio stations like Pandora and many others. The new fees are bizarre -- they are per song rather than based on profits (thereby treating streaming like downloading), and they are totally out of whack with (higher than) the fees charged statellite radio and traditional AM/FM radio.

A few comments... first, I wish that we didn't refer to sites like Pandora as "Internet Radio". I mean, "radio" is a particular technology. It isn't used by the Internet to stream music. Calling sites like Pandora "radio" is confusing and based on inessential similarities. Yes, it is similar in that the music (or other content) is streamed rather than downloaded permanently. So lets call such services Internet Streaming services or Music Streaming services or whatever. That is accurate -- calling them "radio" is confusing.

Second, how many people know much about the federal Copyright Royalty Board? That sounds like something out of a socialist or communist country! What are a bunch of government bureaucrats doing dictating to anyone what they must pay to other people for streaming copyrighted content? Can't the two parties involved contract with each other? I'm not in favor of theft of intellectual property -- but equally wrong is government intervention in the economy... and for the same reasons: both are violations of individual rights.

The third news item linked above has the following bit worth quoting here:

Anyone who spends more than an hour a day in a car -- and there a lot of you in Miami -- knows that commercial radio stations are horrid purveyors of mainstream schlock. Internet radio has made new artists, genres, and songs available to listeners all over the world. Artists have a new way to get their music out there, and small distributors have a way to wrangle in new customers.

Sites like Pandora, which uses the innovative Music Genome Project to create specialized radio stations for its six million users based on what they tell it about their musical tastes, are a blessing to music junkies everywhere.

"We can't continue, at the new rate we can’t sustain the service," said Pandora founder Tim Westergren from Washington D.C., where he is attending congressional hearings on the fee hike. "We are losing money now, even at the old rate, we were looking at another two years before we expected to be in the black."

If the new rates go into effect, and sites like Pandora and W305 shut down, it would be a huge loss for music lovers, and perhaps an even bigger blow to musicians struggling to get their music to the public. A lot of smaller, independent Internet stations may go underground and avoid paying licensing fees all together, Kalimi said.