Royalty rates imposed on Webcasters will only drive Internet radio underground.
In its June 20 ruling regarding royalty rates to be paid to the record industry by Webcasters, the U.S. Copyright Office managed to please nobody and anger everybody.
Under the ruling, radio companies will have pay the recording industry .07 cents each time they play a song over the Internet. Webcasters, who have been all but unable to find advertisers despite drawing large audiences, had hoped that the rate would be set at a percentage of revenue, and are complaining that the rates will put them out of business, if not into bankruptcy. Record companies insist that the rate is too low. Either way, the net result will almost certainly be that Internet radio gets driven further underground, where nobody makes any money.
A recent posting on the message board of the Save Internet Radio! site saveinternetradio.org sounded an ominous note: “If there are 3,000 stations still streaming, the RIAA’s legal crew could conceivably send 3,000 cease-and-desist letters,” wrote an anonymous poster. “But what if there were 30,000? 300,000?” What if, indeed. That seems to be the question that authorities won’t–or can’t–answer.
Maybe history will give a clue. The last surge of pirate radio stations was in the early 1960s, when renegade broadcasters worked from boats in European international waters not subject to mainland regulations. These pirates flourished not only because there was demand for an alternative to the stodgy BBC, but also because there was money to be made. Most of the best-known pirate stations (Radio London, Radio Caroline) didn’t make it past the late ’60s, but thousands of low-wattage pirate stations have continued to operate to this day relatively hassle-free, under the radar of the FCC and other authorities.
Do you see where this is going? With the right technology, it’s easy to stay one step ahead of the radio gendarmes. Services such as AOL’s Shoutcast and software such as Darwin’s open-source Streaming Server allow anyone to create streaming media quickly and cheaply. And there are several techniques of frequency hopping, such as Onion Routing, which provides socket connections that are strongly resistant to both eavesdropping and traffic analysis. Then there’s the fairly simple, if legally dodgy, process of shifting IP addresses.
And the fact is, creating your own pirate radio station is uncomplicated and cheap for anyone with some time, a few extra dollars, and a lot of initiative. Just from an equipment standpoint, all it takes is a stereo system, a mic and mixer, a transmitter, an antenna, and a power supply. And an Internet connection, of course. I’m oversimplifying the sweat and expense necessary, but to twist the cliche, it’s not rocket science, just radio science.
The irony is, it’s the record industry that will probably provide above-board webcasters with a stay of execution. The Record Industry Association of America has made its lust for the hoped-for .14-cent-per-song rate so clear that a flurry of appeals to the Copyright Office’s ruling seems inevitable.
Whether the RIAA gets its way or the rate stays where it is, the reaction of a certain segment of enthusiasts is easy to predict. The DIY ethic among computer enthusiasts has enabled them to do an end-around away from the rulebook in the past, and it will again in this case.
At this point, Internet radio is a buzzing hive of broadcasters and listeners in search of one another. Some estimates of the number of U.S. webcasters go as high as 100,000, with total listenership in the tens of millions. According to Arbitron, the rate of Internet radio listeners is growing at a clip of 100 percent per year.
Those numbers aren’t going to just dry up. For every Yahoo (which shut down several of its radio services in the wake of the June ruling), there are thousands of webcasters who don’t plan or want to make a penny from what they’re doing. It’s hard to stand in the way of a labor of love.