TL DR: THE ISSUES IN BRIEF
Since the birth of internet radio broadcasting in the late 90s, they have been a number of battles regarding how much royalties an internet radio station should pay. Broadcasters in the sector are happy to support their artists by paying the right royalties, but unfortunately there has been a constant tug-of-war on who should pay what.
The collection agencies like Sound Exchange feel that internet radio stations should pay more. The reality is however, increasing the cost of royalties will push those stations who can't afford it off the air. In this matter independent and emerging artists lose out, and businesses that rely on the internet radio industry will shut down from the down turn in business. This is especially microcasters who make up a large portion of this sector
The sector is broken up into tears, the larger outfits like Pandora, Accuradio, and Spotify, and medium sized stations that may have a few thousand listeners. Microcasters are the "smallest of the small webcasters" and have revenue less then $5,000 a year with a few concurrent listeners. Provisions have existed for microcasters to only pay a percentage of their revenue, plus an extra fee for forgoing the responsibility of record keeping; however from the 1st January 2016 this will no longer be the case.
The new Sound Exchange royalty proposal has no provisions for microcasters, meaning that such broadcasters will have to pay the same inflated fees as larger broadcasters. From personal experience, my station's royalty costs have increased by 100% over the last few weeks.
The ultimate result if this proposal is ratified is that many microcasters who cannot afford the fees will simply shut down. The two biggest casualties of this outcome will be both the listeners and record artists. More info on these matters can be found at the below links.
Welcome to Save Net Radio dot Info.
Savenetradio.info is a portal and lobbying campaign for saving the voice of microcasters, the smallest stations of the internet radio broadcasting community.
First of all what is Internet Radio?
Internet radio is completely different to terrestrial radio. Rather then using a transmitter to broadcast to a physical geographical area, an internet radio station broadcasts over the internet to either the entire world, or to specific countries or regions.
Where terrestrial radio broadcasts waves from a transmitter to a radio receiver, internet radio uses software to send data packets over the internet infrastructure such as satellites, phone wires, and fiber. Such data packets contain the sound signals that make up the musical or talk content of the radio station. The data packets are sent to a server that then replicates the packets, so a number of other internet connections can retrieve them, and re-encode them back into sound either on a computer, multimedia mobile phone, or any other internet enabled device.
What are the benefits of internet radio?
Terrestrial radio stations are often expensive to operate, meaning that most of them are owned by large corporate entities. Such stations are then managed as part of an investment strategy, rather then utilised as an entertainment provider. The program material is heavily confined to a corporate format which means the same 50 songs played every day.
Conversely independent internet stations are established by individuals who are passionate about what they are doing. A particular taste of music (pop, rock, jazz, classical, country), is often the specialty of the person running the station, meaning they can enrich their listeners with a playlist of many thousands of tracks. This gives listeners the chance to discover new songs, or rediscovering old gems from the past.
The most expensive part of a terrestrial radio station is the purchasing or bidding for broadcast spectrum, the frequency on the radio dial where the station would broadcast. Government agencies who are responsible for handing out such spectrum often want hundreds of thousands, or millions of dollars for a spectrum allocation. The last FM license in Sydney was auctioned off at AU$106,000,000. In many cases, governments also have vested interests in the corporate radio industry, which also makes it impossible for a smaller group or individual to broadcast.
Terrestrial radio stations also use expensive physical infrastructure to broadcast from. This is often the studio complex, the DX site (the land where the stations transmitter is located), and the upfront transmitter license fees. Internet radio stations on the other hand use computers, software, and the internet, meaning no transmitter license fee is required, which makes the medium more accessible to many more people.
With smaller organisations and individuals enjoying the right to broadcast, program and music content is independent of the corporate influences that drive conventional AM and FM radio. Such formats from internet broadcasters are more varied with unique music selections and experimental programming methods that otherwise would not be heard.
Does internet radio really cheat the artist?
With a vibrant independent internet radio scene, all new and up coming artists whether independent or mainstream have a platform to get their material heard. Artists often have their music purchased from having their song heard on an internet radio station.
Corporate radio is driven by accountants and and executives, meaning the bottom line is the radio station's focus. Such corporate stations therefore only wish to play music they know, thus leaving independent artists no exposure. Network radio owners feel playing unknown artists will affect their listener ship, ultimately impacting their bottom line.
Corporate radio is fixed into a very stubborn mindset, which is effecting how many of us today appreciate the vast legacy of music from the last several decades. To the commercial radio industry, past musical culture is a thing that sits rotting away in a storage room, while this same culture is alive and happening on independent internet radio.
SO WHAT IS THE CRUX OF THE MATTER?
Internet radio is broken down into several tears, the larger players such as Spotify, Accuradio, and iHeart. Medium size players include individual internet stations that may have thousands of listeners on the internet, and may be turning over good revenue.
The final tear of internet broadcasters are "Microcasters". As noted on the Broadcast Law Blog, "Microcasters, defined as those who make less than $5000 annually and stream less than 18,067 ATH per year. (essentially an audience averaging just over 2 concurrent listeners, 24 hours a day 7 days a week)"
There have always been provisions that accommodated the budget situation of microcasters, where they would only pay a percentage of their revenue. These royalty payments were $500 a year, and for an additional $100 annually, they can be exempted from all record keeping requirements.
COULD THIS BE THE END OF INTERNET MICROCASTERS?
Sound Exchange who is the main royalty collection agency in the United States has proposed new royalty payment schemes. In the past, they were provisions for microcasters (the smallest of internet radio broadcasters); however from the 1st January 2016 no such provisions will exist.
This means that royalty rates for microcasters will exponentially increase beyond what many can afford. The knock on effect is several thousand of these broadcasters closing, resulting in listeners, independent voices, and new emerging artists all losing out.
Please sign the newer combined petition operated by John Michaels at BullsEye Radio.
We feel combining forces with this fight will achieve a more conducive result, so please let's all rise to the challenge and keep the spirit of microcasting alive.
Due to some rather unpleasant technical issues, we've decided to close the old petition, however it is still viewable here:
From the 1st January 2016, Sound Exchange will NOT have provisions for microcasters, when considering royalty collections.
This will lead to many stations closing down from exponentially rising royalty costs.
Indepentent voices in the broadcasting sector will be lost.
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