March 07, 2007

Internet Radio Royalties to Increase

Later this afternoon a congressional hearing regarding the new decision by the Copyright Royalty Board, part of the Library of Congress, to raise the "performance" rates for songs listened to over the Internet. I admit straight out that I know little of the full spectrum of the situation, but this bit from Broadcast Law Blog is more than a might bit chilling for anyone thinking about setting up any form of online radio station:

In a 100 page decision, the Board essentially adopted the royalty rate advanced by SoundExchange (the collective that receives the royalties and distributes the money to copyright holders and performers) in the litigation. It denied all proposals for a percentage of revenue royalty (including a proposal that SoundExchange itself advanced)emphasis mine

A bit later in the same article, it's noted that there's a minimum $500 fee per channel, but that the exact definition of a channel is not provided. With that (lack of) information, I can see why Pandora founder Tim Westergren sent out an email to Pandora users asking them to call their respective congressperson to "save internet radio." Say, for instance, that every person is allocated one "channel" on Pandora (it could be worse, each station a person has, I have five, could be listed as a channel), therefore, each person who has a Pandora account is costing Pandora $500 per year, even if only one song is listened to.

This isn't just a problem for Pandora, and the like, it's a problem for any person with an idea for how to make more music more accessible to more people. It raises the barrier of entry for anyone who would like to try sharing, legally, and for short times broadcasting music with anyone who might enjoy it. Even though I don't agree with the idea that a "Free Market" is the ideal way to handle every interaction of society, culture, and business, a move to impede the entry of new ideas into the market certainly is not in the best interests of those who the market, and the government (whose job it is to make sure that the market is indeed free, like speech, not beer, serve.

Business ultimately serve us. Our Government serves us. Remind them.