Net Radio webcasters plan silent protest Tuesday

U.S. webcasters plan to turn off the music June 26 to protest royalty rate hikes

Call it the day the music died, Part 2. On Tuesday, thousands of U.S. webcasters are expected to go silent to protest the planned royalty rate increase by the Copyright Royalty Rate Board.

And although the situation is nowhere near as devastating as Feb. 3, 1959, the day musicians Buddy Holly, the Big Bopper and Richie Valens died in a plane crash, U.S. webcasters say the impending royalty rate increase "would lead to the virtual shutdown of this country's Internet radio industry."

"The arbitrary and drastic rate increases set by the Copyright Royalty Board on March 2 threaten the very livelihood of thousands of webcasters and their millions of listeners throughout the country," said Jake Ward, a spokesman for the SaveNetRadio Coalition, in a statement. "The campaign to save Internet radio -- a genuine grass-roots movement comprised of hundreds of thousands of webcasters, artists and independent labels, and Net radio listeners -- has quickly brought this issue to the national forefront and the halls of Congress, but there is still more to be done before the approaching deadline of July 15."

In an interview, Ward said webcasters are taking this step despite the hit their advertising revenue will take that day.

"Giving up one day of revenue is better than closing their doors forever," he said.

On Tuesday, some webcasters will shut off access to their music streams, while others will replace their music streams with long periods of silence, or other white noise, interrupted only by public service announcements about the issue, according to the statement.

"Internet-only webcasters and broadcasters that simulcast online will alert their listeners that silence is what Internet radio may be reduced to after July 15, the day on which 17 months' worth of retroactive royalty payments -- at new, exceedingly high rates -- are due to the SoundExchange collection organization, following a recent Copyright Royalty Board (CRB) decision," according to the statement.

Earlier this year, the federal CRB set rates that would at least triple the amount of royalties Internet radio broadcasters must pay to copyright holders to play a song.

Under the board ruling, royalty rates will be changed from a percentage of revenue to a per-song, per-listener fee. The entities affected include pure-play Internet radio stations, digital music stations and traditional broadcast stations that also stream their programs. The new rates, which would be retroactive to 2006, would increase until 2010.

Federal lawmakers have filed legislation that would reverse the board's decision.

Last month, SoundExchange, the group that collects royalties from Internet radio broadcasters, offered small Net radio stations more time before they would have to pay the higher royalty rates to stream music online. However, webcasters declined to accept the offer.

"On Tuesday, thousands of webcasters will call on their millions of listeners to join the fight to save Internet radio and contact their congressional representatives to ask for their support of the Internet Radio Equality Act," according to the statement.

The webcasters participating in the day of silence include Yahoo; Live365 stations; Pandora.com; MTV Online; AccuRadio; KCRW in Santa Monica, Calif.; WGLI in Babylon, N.Y.; WMUK in Kalamazoo, Mich.; KFCF in Fresno, Calif.; LuckySevenRadio.com; RadioMilwaukee; KQLZ in Los Angeles; and KXPR/KXJZ in Sacramento.

Sarah Spitz, a spokeswoman for KCRW, in an e-mail response to Computerworld, said the station strongly believes "that artists deserve royalties. But we do not agree with the CRB's penalizing rate increases that punish Internet success and treat public radio stations and small webcasters in the same way as commercial radio stations. Would you put a cap on the use of library books because there's a Barnes and Noble next door? The copyright Royalty Board's decision supports copyright holders over the public interest."

Spitz also producing an hourlong program for KCRW for broadcast on Tuesday called "D-Day for Webcasters." She said the program will run online in lieu of the stations' regular programs from midnight to 11:59 p.m. on Tuesday.

Pandora.com founder Tim Westergren added, "If these rates aren't changed, Pandora won't exist anymore, so it can't get much more important for us. One of the big fears is that the change happens and it doesn't get fought because people don't know about it, or don't appreciate the reality of it, and there's no better way to bring it home than to give a sampling of what it's going to be like if the rates actually go through."

Copyright © 2007 IDG Communications, Inc.

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