Well, I’m overdue:
Thanks to the newly implements royalty rates, several major web broadcasters are on the verge of shutting down, including Yahoo and Time Warner’s AOL. (Yahoo’s Launchcast is the largest Web radio site.)
The 38% percent increase in royalties
to air music was simply too great to allow broadcasting to continue.
Bloomberg had the scoop:
"Yahoo and AOL stopped directing users to their radio sites after SoundExchange, the Washington-based group representing artists and record labels, began collecting the higher fees in July. Those royalties may stifle the growth of Internet radio, which increased listeners 39 percent in the past year, according to researcher ComScore Inc. in Reston, Virginia.
As a result, the number of people using Launchcast fell 11 percent
to 5.1 million in October, according to ComScore. AOL Radio users
declined 10 percent to 2.7 million from 3 million. Radio sites
attracted 51.2 million U.S. visitors last month, more than a quarter of
all U.S. Web users.
Radio sites have been "dealt a severe blow,” said Jeffrey Lindsay, an analyst at Sanford C. Bernstein & Co. in New York. "It seems very unlikely that at this stage a solution will be reached.”
Wired previously reported that:
The US Court of Appeals for the District of Columbia has set dates for the first part of the appeals process initiated by DiMA, NPR, IBS, AOL, Yahoo, the National Religious Broadcasters Noncommercial Music Licensing Committee, and other webcasters; Various groups of webcasters who filed appeals will have to submit their first briefs to try to convince the court why an appeal is so necessary by February 25, 2008.
You can see why the industry would want to raise fees: With terrestrial radio dying, and CD sales on the downslide, its important to prevent any additional promotion of the products.
Here’s a suggestion: Why don’t the artists not affiliated with major labels (Eagles, Radiohead, Pearl Jam, James Taylor, etc.) as well as Indie artists undercut the labels, and offer web broadcasters a cut rate?
Perhaps a little competition might be good for everyone . . .
Yahoo, AOL May Abandon Web Radio After Royalties Rise
Bloomberg, Nov. 28 2007
Webcasters’ Appeal of Royalty Rates to Begin in February
Eliot Van Buskirk
Wired, November 20, 2007 | 3:35:45 PM