Music Industry Royalty

If you are a fan or user of internet radio stations, you likely know what this post will be about.  If you are not….well……you probably should catch up with the times.  There are (or were) many ways to listen to internet-based radio stations.  Your local station may broadcast online, as well as a myriad of choices through popular music software (iTunes radio for example) and there is always the web based stations such as Digitally Imported and Pandora.

Internet radio used to be mostly commercial free, but then when the cost of bandwidth and server space became too great many station opted for short snippets of commercials, or relied on online advertising for support. I might be skipping a few facts here and there, but what basically happened next is that the fat cats in the industry didn’t want to miss out on squeezing every last cent out of everyone within their reach so they imposed a serious increase in the royalty rates internet radio stations must pay.

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This battle went on for much too long, and forced many smaller stations to close their servers.  Only in the past few days has it been reported that the two sides came to an agreement on the royalties.  For example, one of my favorite stations Pandora, will now cap usage per user to 40 hours per month in order to be able to afford the royalties.  If you would like to listen more then you can either pay $0.99 for unlimited usage the remainder of that month, or pay $36 per year for their subscription service, or just have more than one user account.

Is one to three dollars a month a lot to pay for online radio stations?  No.  But what happened to making music for the love of making music?

And what is the difference between online radio stations and your local “terrestrial” radio station?  From what I have read, traditional AM and FM broadcasters are exempt from copyright royalty rates for over-the-air radio play, because that airplay is thought to provide free promotion for artists and labels.  How is internet radio any different?  And before you argue that you can digitally capture online radio streams consider this: 1) FM radio is how I made my first mix tape and 2) the audio coming across the internet is mostly very low-fi.  I don’t get it.

The only thing I do get is that internet radio is clearly the future, and that it will take a few years for everyone to figure it out.  Until then – lets hope that we can all continue listening. For free.

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