Internet Radio: Doomed?

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Miscellaneous, Technology

I listen to a lot of music. As much as I can, I listen to music while I’m working. I listen to music as I browse the web. I listen to music at the gym. All in all, I’m probably listening to music about half the time that I’m awake (which is rather scary, I suppose, but there it is).

Mostly I used to listen to my own collections of music, and while I still do that, it’s not always possible. In the absence of being able to listen to exactly what I want, when I want, I’ve taken to listening to internet radio a lot. For the most part I listen to one of the stations at Digitally Imported Radio, as I can get relaxing ambient music or various forms of electronica which are entertaining enough to listen to but not distracting.

One recent development that has me a bit concerned is Congress’ recent passing of a bill to raise royalties on internet broadcasters. Although I wouldn’t be traumatized if internet radio went under altogether, it would be kind of disappointing to me. I mean, it would really limit my exposure to new music, and it would limit my options in listening to music overall. Not to mention, at one time I was involved in running a small-scale internet radio station and I wouldn’t mind getting involved in that again at some point.

A breakdown of some numbers can be found here. Excerpts:

First of all, the rates webcasters pay are “per performance,” meaning any time ONE listener hears ONE song (or any portion of a song), that’s a “performance.” If ONE listener hears ten songs, that’s TEN performances. If 1000 listeners hear ten songs, that’s 10,000 performances.

Let’s imagine a webcaster with an AVERAGE audience of 10,000 listeners (obviously, listeners come and go, and no one listens 24 hours a day, but we’re talking about an average number… so sometimes there’ll be lots more than 10,000 folks listening, sometimes lots less… but for math’s sake, let’s deal with the AVERAGE audience). Our webcaster plays 16 songs every hour, 24 hours a day, 365 days a year, to an audience that averages out to be 10,000 people.

$0.0008 X 10,000 listeners X 16 songs/hr. = $128. It’ll cost our imaginary webcaster $128 to play one hour of music for 10,000 people.
At the end of the day, that’s $3,072 ($128 X 24 hrs./day) — for just a single day! After a week goes by, it’s $21,504 ($3,072 X 7 days/wk.). And for all of 2006, this webcaster with a steady average audience of 10,000 listeners would owe $1,121,280!! (the $3,072 X 365 days/yr.)

I don’t really have any idea on how much money most of these internet radio stations make, but I can pretty much guarantee that they don’t make over a million dollars per stream. The tricky part is that even though this initiative is purely an RIAA-induced move (I’ll leave out motive speculation), the means through which it is done, the SoundExchange, is used by every label. So even though most, if not all, of the music played on the internet radio stations I listen to is non-RIAA, their initiative has punitive effects regardless of the label carrying the artist.

There’s a website listed here called SaveNetRadio.org to protest the new royalty rates. I’ll probably write a letter to my representative about it, though I’m debating whether the additional efficacy of an actual letter is worth the additional effort over an email.

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