Radio, Radio: Digital Royalty Fight
April 17th, 2007
A strange coalition of Internet radio stations, including National Public Radio, AOL, Yahoo, and dozens of small start-ups, have failed in their attempt to reverse a March court decision that forces broadcasters to pay royalties on a per-song, per-user basis. While this won’t kill the industry, many are forecasting massive cutbacks to a service that, frankly, just makes sense online.
The current royalty fight is just another in a string of miscalculations by the music industry over how to conduct its business effectively in the Internet Age. The injustice of this new ruling is not that online broadcasters will have to pay royalties – they already do, just with a different payment calculation – but that terrestrial stations will continue to be exempt from the same requirements. By record label reasoning (you know, the same kind that brought you Nickleback) your local FM broadcasters are doing them a great service by promoting albums over the air while online DJs will have to, literally, pay-to-play.
What a ridiculous double-standard, not to mention a terrible business model. Just think, which is more likely: you hear a song in your car and drive immediately to a record store, or you hear a song online and click straight over to iTunes?
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