R23 Information Services #125

Internet Radio Stations Play More Artists Than Broadcast Stations

audio4cast.com

NPR Partners with Livio for Internet Radio Device

wired

What is the future of music online?

bbc

FCC Neutrality Ruling Tomorrow

daily wireless

Google to Launch Music Service

hypebot

R23 Information Services #117

iPod nano gets FM with pause and tagging

apple

iTunes LP: Video & A First Look

hypebot

Facebook, Twitter integration comes to iTunes

cnet

British Library releases 23,700 rare audio tracks online

cbcnews

While terrestrial radio is in trouble, Internet radio is growing

emarketer

R23 Information Services #116

The arrival (finally) of Internet radio

sfgate

From a Porch in Montana, Low-Power Radio’s Voice Rises

nytimes

Gen X Radio "Louie" Debuts on Clear Channel

idolator.com

XM Canada Owes Musicians' Royalties

fmqb

Spotify: iPhone Radio

dailywireless

Radio23 Information Services #67

Cadillac rolls out in-car Internet access cnet

Apple and AT&T Sued (again) Over 3G Speed DailyWireless

How Sprint Leads Transformation towards 4G Services, Plan WiMAX Handset Wimax.com

SXSW: Should Radio Stations Pay Recording Artists? wired

Turn a Vintage Radio into a Wi-Fi Internet Radio lifehacker

Internet car radio

From MIT Technology Review:

Internet radio lets listeners find or create stations that play just the music they like. A dashboard stereo from miRoamer and Blaupunkt brings that kind of control into the car. The stereo connects wirelessly, via Bluetooth, to the driver's phone, which streams music over the cell network. Users can preprogram their favorite stations and create song playlists online. The system has a built-in microphone, so that users can make and receive phone calls by pressing a button on the radio. Cost=$300-400.

Web radio bill passed

From Ben Sisario Oct. 1 in The New York Times:

Internet radio services are breathing a sigh of relief after the Senate approved a bill on Tuesday that would allow them to renegotiate a royalty rate that Web broadcasters say is too high. By law, Web sites like Pandora.com and Live365.com have to pay the performers and owners of the recordings they broadcast, and have been in a tug-of-war with record companies over the size of these payments. (Songwriters and music publishers are paid a royalty by radio stations and Web broadcasters; Web broadcasters also pay the performer.) Under the terms of the Webcaster Settlement Act, which was passed by the House on Saturday and now goes to President Bush for his signature, Web broadcasters have until Feb. 15 to negotiate with SoundExchange, the agency that collects and distributes the royalty. Under the current rate set by federal statute last year, said Tim Westergren, one of Pandora’s founders, his site has had to pay 70 percent of its gross revenue for this performance royalty, and will have to shut down if it is not reduced.

Briefing dates set on internet radio royalty court appeal

From David Oxenford in Broadcast Law Blog:

The US Court of Appeal for the District of Columbia has set the briefing dates on the appeal filed by various webcasting groups seeking review of the decision of the Copyright Royalty Board setting Internet radio royalties for the period 2006-2010 for the use of sound recordings (see our coverage of this controversy here, and a detailed summary of the CRB decision here). The briefs of the various webcasting groups who appealed are due on February 25. The brief for the CRB (represented by the Department of Justice) is due on April 25, and that of SoundExchange (the "Intervenor) will be filed on May 15. Reply briefs are due on June 12, and oral arguments are yet to be scheduled. As the Court usually takes a summer break in July and August, the argument is likely to be held in the Fall of 2008, and a decision would likely not come until very late in the year or, more likely, in 2009.

Appeals were filed by the a number of groups including large webcasters (including AOL, Yahoo and DiMA), the small commercial webcasters, various noncommercial groups (including two collegiate broadcasting groups and the National Religious Broadcasters Noncommercial Music Licensing Committee), and various commercial broadcasters who also stream their signals on the Internet. A group called Royalty Logic, which is seeking to become a collective that is competitive with SoundExchange, also filed an appeal of the CRB decision.

Already, there has been a settlement announced on one narrow aspect of the case, the minimum fees for companies that stream multiple channels, limiting the per company minimum fee to $50,000. Obviously, if there are other settlements, these appeals could become unnecessary in whole or in part.

Car WiFi radio: huge

From Daily Wireless:

Bridge Ratings says traditional and satellite radio will take a significant hit in listening about a decade after WiFi and WiMax technologies are available in-car.
Bridge Ratings surveyed consumers and device manufacturers and projects that WiFi in-car should reach more than 50 percent of the U.S. population after nine years of market availability.

According to Bridge, of the estimated 30 million users of wireless access technology in the U.S., 75 percent (23 million) have wireless-accessed Internet radio. In fact, 48 percent of those accessing the Internet via wireless technology seek out Internet radio. The number of Internet radio listeners accessing wirelessly will grow to 77 million by 2010 as wireless technology penetrates the U.S. lifestyle. The gating factor may be how quickly auto manufacturers are able to equip new cars. By the fifth year of in-car WiFi acceptance, traditional radio can expect to see the amount of time spent listening to fall below 19 hours a week; by year eight, when Bridge projects that more than 23 percent of the public will have adopted wireless Internet technology in-car, weekly time spent listening to traditional radio will fall below 18 hours per week.

By the ninth year of market availability the combination of natural market growth (1-2 percent per year) and a more effective effort at selling its Internet radio channels, traditional radio revenues could reach over $26 billion.

This can’t be good news for the Radio Advertising Bureau (RAB), with nearly 7,000 members including close to 6,000 stations in the U.S., and over 1,000 associate members in networks, representative firms, sales, and international organizations. Their figures indicate a combined local and national annual radio advertising revenue around $10 billion for the first half of 2007.

Will Web radio stations be forced to combat copying?

From Farhad Manjoo in Salon:

Late last week SoundExchange, the recording-industry group that collects royalties from Internet radio stations, agreed to limit one key part of the new fees that threatened to shut down a great many webcasters. But now it seems that SoundExchange's benevolence came at a price: in exchange for reducing fees, the recording industry wants webcasters to prevent listeners from copying the music they get through Internet radio -- despite the fact that such copying may be perfectly legal.

SoundExchange had previously asked radio stations for $500 for each channel of music that they send out to listeners, a fee that would have added up to more than a billion dollars for the industry. On Friday, the royalty group agreed to cap the amount at $50,000 per webcaster. The fee cap all but saved Internet radio from certain death.

As Ars Technica points out, though, SoundExchange says in a press release that it will only extend the deal to webcasters who "work to stop users from engaging in 'stream ripping' -- turning Internet radio performances into a digital music library."

Stream ripping refers to the practice of recording songs from an Internet feed. Several programs -- StationRipper, RadioLover, Streamripper, among others -- make this a pretty easy process. Once your record a song from an Internet radio channel, you can play it like any other MP3, in any order you choose, without logging back in to the webcaster's stream. Considering how easy that sounds, some industry observers have speculated that people who were scared off by file sharing may be moving to stream ripping as an alternative source of free music online.

But there isn't much firm data about the practice. The recording industry has trouble estimating how many music files are traded illegally online, but recording a Web radio stream, like recording a show on TiVo, occurs off the network, in the privacy of your own computer. And even if stream ripping is widespread, it's not clear what radio stations can do to stop it. Stream rippers work by capturing the music going straight to your PC's speakers, in much the same way that your TiVo or your VCR copies video as it flies between your cable box and your TV. Copy-protection programs simply can't stop this sort of copying.

And though legal opinion is unsettled on the question, many copyright experts argue that stream ripping, like recording TV shows on your VCR, is legal. All you're doing is "time shifting" -- recording something at Time A to play back (for yourself) at Time B.

Like the music industry, Web radio stations aren't big fans of stream ripping. They'd rather have you come back to their site each time you want to listen to music. But many also stay away from the main methods to combat ripping -- webcasting at a lower bitrate, mixing promos and jingles over the music, crossfading songs so they don't start and end cleanly.

You have to wonder if the recording the industry -- now that it's got webcasters locked in negotiations for their future -- will have any trouble imposing such reduced-quality streams.

Legislation introduced to postpone internet radio royalty rate increase

From a press release from Nydia M. VelÃzquez:

Last night, Chairwoman of the Committee on Small Business, Nydia M. VelÃzquez and Ranking Member Steve Chabot came together to introduce bi-partisan legislation in a final attempt to postpone the implementation of new royalty rates for webcasters and allow additional time to find a solution. The new rates put into place by the Copyright Royalty Board (CRB), are scheduled to go into effect this Sunday, July 15 and many caution that their implementation will mean the end of the industry for Internet radio. Efforts to reach a compromise have not yet been successful, and this legislation, HR 3015, would delay implementation of the rate increase by 60 days, allowing continued negotiation so a satisfactory arrangement can be reached.

"We are coming down to the wire on this issue, and as the royalty rates currently stand, I am concerned that webcasters and musicians alike will be harmed, perhaps even irreparably," said Chairwoman Velázquez. "There has not yet been an agreement reached that provides fair compensation to artists while allowing broadcasters to stay on the air without excessive fees. I urge my colleagues to support this bill to allow an opportunity for that compromise to be reached."

H.R. 3015 would postpone the implementation of the CRB decision for two months, allowing internet broadcasters and the music industry more time to come to a suitable compromise. Under the current fee structure, firms pay a percentage of their revenue, a system beneficial to small companies with lower profit margins. The new regulations would designate a flat fee that must be paid each time a song is played. For many small broadcasters, this would drastically increase their costs and some industry insiders have projected that royalty payments will more than double. The new fee system will also cover all broadcasts since January 1, 2006, leaving webcasters open to high back payments and possible legal action for unauthorized public performance. H.R. 3015 would maintain the current revenue based system for 60 days past the July 15 deadline, during which time, a more equitable system can be agreed upon. VelÃzquez and Chabot sent letters to the Chair and Ranking Member of the House Judiciary Committee, urging them to adopt this legislation. A letter was also sent to Sound Exchange and the Digital Media Association advising the groups to use the 60 days to make earnest negotiations.

"The July 15 implementation date of the CRB's ruling is making on-going negotiations more challenging," said Congressman Chabot. "During last month's Small Business Committee hearing on this issue, there was a consensus among the Committee Members that it would be preferable to have this matter resolved between the parties. This legislation creates a positive environment to encourage continued dialogue and negotiation."

The Committee held a hearing on June 28 to hear testimony on the impact the CRB decision will have on internet broadcasters, musicians and record labels. Both sides of the issue came to the table and the consensus was that fair compensation to musicians was crucial, but that the royalties as they currently stand could be prohibitively expensive for small internet broadcasters. Additionally, independent musicians voiced there support for internet radio, citing its promotional value,
as most terrestrial radio stations limit their broadcasts to mainstream
artists.

"We must find a solution that will satisfy both sides of this issue, and a little more time may be all that is necessary," Chairwoman VelÃzquez said. "It is critical that we take steps to ensure that small internet webcasters continue to thrive."

Latest webcasting royalty developments

From Broadcast Law Blog:

The past few days have been eventful ones in the battle over Internet radio royalties. Appeals from the decision of the Copyright Royalty Board decision (see our memo explaining that decision, as well as our coverage of the history of this case) were submitted by virtually all of the parties to the case. In addition, the National Association of Broadcasters, which had not previously been a party to the case, filed a request to intervene in the appeal to argue that the CRB decision adversely affects its members. Also in Court, a Motion for Stay of the decision was submitted, asking that the CRB decision be held in abeyance while the appeal progresses. The "appeals" that were filed last week are simply notices that parties dispute the legal basis for the decision, and that they are asking that the Court review that decision. These filings don't contain any substantive arguments. Those come later, once the Court sets up a briefing schedule and a date for oral arguments - all of which will occur much later in the year. As the CRB decision goes into effect on July 15, absent a Stay, the appeal would have no effect on the obligations to begin to pay royalties at the new rates.

The Stay was filed by the large webcasters represented by DiMA, the smaller independent webcasters that I have represented in this case, and NPR. To be granted a stay, the Court must look at a number of factors. These include the likelihood that the party seeking the stay will be successful on appeal, the fact that irreparable harm will occur if the stay is not granted, the harm that would be caused by the grant of a stay, and the public interest benefits that would be advanced by the stay. The Motion filed last week addressed these points. It raised a number of substantive issues including the minimum per channel fee set by the CRB decision, the lack of a percentage of revenue fee for smaller webcasters, and issues about the ability of NPR stations to track the metrics necessary to comply with the CRB decision. The Motion raised the prospect of immediate and irreparable harm that would occur if the decision was not stayed, as several webcasters stated that enforcement of the new rates could put them out of business.

SoundExchange will have the opportunity to respond to the Motion, and the Court will then consider its merits. Watch to see a decision on the Motion by July 15. In addition to the actions in Court, SoundExchange publicized an offer of settlement made to noncommercial webcasters, an offer which was similar to that made to small webcasters (summarized here) - extend the provisions of the Small Webcaster Settlement Act until 2010, with a few tweaks. The SWSA for noncommercial webcasters required fees of between $250 and $500 per year for each noncommercial webcaster, as long as the webcaster had less than 146,000 aggregate monthly tuning hours of listening. If the webcaster exceeded that listening, it would pay at the rate of .251 cents ($0.00251) per aggregate tuning hour over the limit. The SoundExchange offer suggested a few tweaks, including requiring that noncommercial webcasters provide records of use of sound recordings - something not required under the SWSA. The current requirements for Internet radio recordkeeping are summarized here.

The offer was made to a number of noncommercial webcasting groups, so there will need to be negotiations before any deal is final. And as NPR had its own deal arrived at outside of the SWSA framework (a deal that is not public), they may well have concerns with this proposal which requires the same sort of record keeping about which its has expressed concerns in the Motion for Stay.

Copyright Royalty Board puts internet radio on death watch

From David DeJean in Information Week:

The Copyright Royalty Board has quickly and completely affirmed its own decision on performance royalties, set in accordance with recording-industry wishes, that will be assessed against Internet music-streaming and radio-station sites. Because the rates, which were more than a year overdue, were much higher than the Internet radio industry expected, and retroactive for 2006, one possible result is that many small Internet radio operators will cease operations immediately and wait to see if Congress or the courts will provide relief.

The board in March adopted the recommendations of the recording industry, and the action created a storm of protest from broadcasters and the many small businesses that had been created to serve niche markets via the Web. The rate-setting decision more than doubled the rates for 2006, and mandates further major increases in 2007 and 2008. The board invited requests for a rehearing, and then speedily ignored them, deciding yesterday that it had been right all along.

Exactly why the recording industry wants to radically restrict Internet radio eludes me. I wrote just earlier this week, in a review of music-discovery Web sites, that these services are just beginning to offer the music industry a real alternative to the declining broadcast radio business in terms of exposing listeners to the record companies' products. It looks like the music industry remains unable to overcome its inability to understand and deal effectively with technology.

There was one area where the board agreed with the rehearing petitioners, according to David Oxenford, who writes for the Broadcast Law Blog: it issued clarification requested by SoundExchange (the company formed by the recording industry to collect the performance royalties) emphasizing that the performance royalties apply not just to PCs, but to streaming received over mobile phones, too. Otherwise, wrote Oxenford, "The board did not specifically address the requests for rehearing of the $500 per channel minimum fee that could be interpreted to require a minimum fee for each stream created by a service like Pandora, and would certainly require huge royalties by services like Live 365 -- regardless of how many people listen to the streams. It also did not even address the issue raised by the broadcasters, pointing to the fact that SoundExchange had offered an expert witness in the satellite radio proceeding who contradicted the expert witness offered by SoundExchange in this case -- the expert on whose testimony the Copyright Royalty Board's decision was based."

Internet broadcasters' hopes now rest on Congress and the courts. Rep. Edward Markey (D-Mass.), chairman of the House panel on telecommunications and the Internet, has strongly criticized the Copyright Royalty Board's ruling, for example. The satellite radio case that Oxenford referred to, the merger of XM and Sirius, is another matter before Markey's committee, and testimony in that case had claimed that the growth of Internet radio would counteract any anti-competitive effect of a merger -- a statement that now appears a lot less certain.

The next procedural step, according to Oxenford, will be the publication of the royalty decision in the Federal Register by the Library of Congress. After that, interested parties will have 30 days to file a notice of appeal of the decision with the US Court of Appeals for the District of Columbia.

The end of internet radio?

From Daniel McSwain in Radio and Internet Newsletter:

The Copyright Royalty Board (CRB) has announced its decision on Internet radio royalty rates, rejecting all of the arguments made by Webcasters and instead adopting the "per play" rate proposal put forth by SoundExchange(a digital music fee collection body created by the RIAA). RAIN has learned the rates that the Board has decided on, effective retroactively through the beginning of 2006. They are as follows:
2006
$.0008 per performance
2007
$.0011 per performance
2008
$.0014 per performance
2009
$.0018 per performance
2010
$.0019 per performance

A "performance" is defined as the streaming of one song to one listener; thus a station that has an average audience of 500 listeners racks up 500 "performances" for each song it plays. The minimum fee is $500 per channel per year. There is no clear definition of what a 'channel' is for services that make up individualized playlists for listeners. For noncommercial webcasters, the fee will be $500 per channel, for up to 159,140 ATH (aggregate tuning hours) per month. They would pay the commercial rate for all transmissions above that number.

Participants are granted a 15 day period wherein they have the opportunity to ask the CRB for a re-hearing. Within 60 days of the final determination, the decision is supposed to be published in the Federal Register, along with any technical corrections that the Board may wish to make. Within 30 days of publication in the Federal Register, it can be appealed (but only by the participants) to the U.S. Court of Appeals of the District of Columbia.