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Disaster looms! Two days ago now a federal court denied a plea to delay the massive increase in rates webcasters must pay the record labels. This means that, absent immediate Congressional action, the new ruinous royalty rates will be going into effect on Monday threatening the future of all internet radio.

People can actually help stop this by calling their Congressional representatives in the Senate and asking them to force immediate action on the Internet Radio Equality Act and bring the bill to a vote. It is critical that their phones begin ringing off the hook starting early in the morning. If it’s busy, please try again later.

Senator Christopher J. Dodd: (202) 224-2823

Senator Joseph I. Lieberman: (202) 224-4041

Basically these New rates signal day Web-radio music dies.

Every band dreams of the lucky night it’ll be discovered by a music promoter or favorite record label. Overnight you’ve got a hot record, radio stations everywhere playing your songs and your band becomes a household name. It’s the classic musician’s fairy tale.

But it is a fairy tale and, for every new artist who is discovered by a major record label, there are thousands who aren’t. For the rest of us, pursuing a career in music is hard. Now, proposed new royalty rates for Internet radio threaten to make it harder. The Copyright Royalty Board recently issued catastrophic royalty rate hikes — increases from 300 to 1,200 percent — which are set to take effect July 15. And some of the increases will be retroactive to January of last year.

While music artists certainly benefit from royalties, this kind of royalty rate hike will mean bankruptcy for almost every Webcaster. Music is a labor of love for many Webcasters, as it is for so many musicians. A significant number of small Internet radio stations already operate at a loss; they carry on because of their commitment to the music they play. A dramatic rate hike is more than most can bear.

Right now, independent artists make up less than 10 percent of what’s played on broadcast radio, but on Internet radio, we make up about 37 percent.

The reality is if our representatives in Congress allow these new royalty rates to go into effect — and it’s within Congress’ power to decide — it’ll make it far harder for independent artists like us to make it. Worse for those of us who are also music fans, online radio will start to sound a whole lot more like broadcast radio. Millions of people whose musical tastes aren’t served by broadcast radio will be left without an alternative.

While we’ve become believers in Internet radio for selfish reasons — as both artists and listeners — the principle of creating a marketplace encouraging artistic entrepreneurs stands on its own. It should be no surprise that the Internet, which has been the source of innovation in so many different industries, has been the home of and outlet for innovation in the music industry.

From an artists perspective, killing Internet radio means that thousands of great bands will go undiscovered — and that’s nothing but bad news for artists.

Killing Internet radio will not only stifle the great technology we have now, it will also stifle the innovation of even better, newer and more exciting ways to enjoy music — and that’s nothing but bad news for all of us.

So while you may think that Internet Radio is not going to suffer, think again. These stations that broadcast music are not making massive amounts of ad revenue to begin with. A push towards these higher royalty fees is no doubt going to hurt the amount of fresh music you will get to hear.

Tags: Music News, play, Radio, State   Posted Music News |