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Copyright ruling may end ironically
04.08.07
Sunday, April 08, 2007

Back when TechMan was just a TechBoy, he had an uncle who was a radio announcer.

So TechBoy's home was filled with radios. In fact, I remember when Uncle Henry bought one of the first transistor radios. People were agog. Imagine, an AM radio that could fit in your pocket.

It was not a surprising that TechBoy developed an interest in radio and particularly shortwave radio. First I had a Hallicrafters tube model that my uncle gave me. If you remember, you had to let the tubes warm up, and then, after a delay, the radio would come on.

Next I got another Hallicrafters, still tubes, but smaller. Then in the early '90s TechMan bought himself a Radio Shack model that he used to listen to world news stations at the time the Soviet Union was breaking up.

This long and winding introduction brings me to Internet radio and some angering news.

In early March, an obscure government panel known as the U.S. Copyright Royalty Board caved in to the Recording Industry Association of America, the draconian industry group of the big record companies that gets its jollies from suing college students for music sharing.

The copyright board rubber-stamped an RIAA proposal that was first put forward in 2002-03. It would impose a fee structure for playing a copyrighted song (that includes just about all songs) that is retroactive through 2006 and rises yearly through 2010.

Internet-only radio stations would have to pay a fee each time they play a song per listener.

The result, if the ruling stands, is that the charge for streaming music would be more than the total revenues of most Internet-only radio stations and they would go out of business.

According to the Radio and Internet Newsletter (www.kurthanson.com) the average Internet-only radio station makes about 1 to 1.2 cents per listener hour. The royalty charge in 2006 would be 1.28 cents per listener hour. And then the Webcasters would have to pay composer royalties on top of that.

There is some hope because the royalty board has granted a rehearing of their decision.

But if the decision stands, TechMan thinks the recording industry could actually end up hoisted on its own petard.

Think about this. What is the main thing the big record companies have going for them? The quality of their music? Britney Spears and the "American Idol" winners give the lie to that.

The recording industry's main advantage is the huge amounts of money it's able to spend to get its artists airplay and promotion.

Suppose Internet radio is priced out of playing mainstream music. It will then go to independent artists and labels that will allow their music to be played on the Internet without excessive copyright royalties.

And as media on the Internet moves into the living room, listeners will be exposed to independent artists and will hear the quality of their music.

And so the promotional advantage of the big record companies would be weakened. Wouldn't that be poetic justice?

First published on April 8, 2007 at 12:00 am