Internet Radio: ‘No one’s profiteering here.’
The royalty fees paid by Internet radio broadcasters has always been a little eye raising considering the small audiences and predominance of lesser known artists. Things really became out of whack when the Copyright Royalty Board voted to uphold its most recent decision - a decision that would triple the current rate and be retroactive to January 1st, 2006. Some broadcasters simply turned features off overnight (like Last.fm’s neighbor streaming radio). Others, like Pandora’s founder Tim Westergren, have spoken out about the ruling. From his interview with Gizmodo:
For most (including Pandora), it’s still a money-loser at the old rates that we are working as hard as we can (15 full time sales people are on the job) to turn profitable in a year or two. The growth figures put out by JP Morgan (recently revised downward from $500M to $150M) don’t mean profitability—they mean more revenue which comes with greater costs. It’s a thin margin business at best. No one’s profiteering here.
Some extremely sobering information. Not only are investors in new streaming music startups likely to head for the hills but existing contributors have to be concerned with those statements.
If you interested in helping SaveNetRadio.org is doing the ubiquitous petition thing. But beyond wagging our fingers and shaking our heads what can be done? And if the online radio was a crap business to be in anyway is it worth saving?
