Bill Virgin's Radio Beat - March 22, 2007

[radiofan]

On Radio: Internet radio is singing the song-rights blues
By BILL VIRGIN
P-I REPORTER


For as promising a technology as it has been, and could be, Internet radio has had a bumpy existence, expanding as traditional radio stations and webcasters try it out, contracting in the middle of fights over royalty payments for music and advertisements carried on such services.

Internet radio could be headed for another period of contraction. At least that's what broadcasters and Internet radio operators say could be the result of a recent ruling that will increase royalty rates for music distributed through digital channels.

The timing is interesting, coming as it does just as new devices that let listeners "tune" Internet radio stations (using a wireless connection), much as they do conventional radio, are hitting the consumer market. Internet radio, some say, could eclipse such technologies as HD and satellite radio.

The latest dispute was touched off by a little-known federal government agency, the the Copyright Royalty Board of the Library of Congress, which enacted a schedule of much higher royalty fees to be paid for each performance of a piece of music; it also set a minimum payment for every "channel" of distribution, which could hit aggregators of webcasts such as Live365.com. In addition, the increases were made retroactive to 2006.

The plan prompted the ire of traditional broadcasters ranging from National Public Radio and Clear Channel to Web-only broadcasters, who filed for reconsideration of various parts of the decision. On Tuesday, the board said it would reconsider.

John Lyman, owner and operator of Jet City Radio, a Tacoma-based Internet station, writes in a memo that webcasters aren't necessarily opposed to higher rates, and they agree that Internet stations that aren't paying any royalties are a problem.

But he also says the size of the increases and their retroactive application "would wipe out an entire class of business: small, independent webcasters such as Jet City Radio and many others. Jet City Radio's obligation under this rate structure would be equal to over 125 percent of our total income. There is no practical way for us to increase our income so dramatically as to render that affordable."

The higher rates also will affect traditional broadcasters trying to expand their audience and offerings with digital channels, adds NPR spokeswoman Andi Sporkin. "It will make some stations cut back and cause others not to offer" the additional service, she says.

But Sound Exchange, which collects and distributes royalty payments, says "artists have earned the right to be fairly compensated for the performance of their work by webcasters who benefit -- financially or otherwise -- from their talents. Without these royalty payments, these artists would, in many cases, be unable to continue contributing to the music world."

Derryl Harris, who operates Tacoma-based Webradiopugetsound.com, said the dispute could force many webcasters into a business model his operation switched to some years ago. When royalty rates became too hefty, Harris says, his station began negotiating with artists individually, swapping the right to play music for promotional consideration. That means focusing on independent and up-and-coming musicians, although Harris said he's trying to expand to established artists who no longer are signed to a recording contract. "If they don't get these rates down, I doubt a lot of these small (webcasters) are going to negotiate with big labels," he says.

In other radio notes:

Comedian, "Saturday Night Live" veteran and former football commentator Dennis Miller now has a nationally syndicated radio talk show, which makes its debut locally at noon Monday on KKOL-AM (1300). Miller's show replaces one hosted by Jerry Doyle.

KMTT-FM (103.7) program director Shawn Stewart is no longer with the station. Entercom vice president and market manager Jerry McKenna called the move "just a change in leadership," and said no other changes are planned for personnel or music format at The Mountain.

Don Riggs' guests on "Introspect Northwest" at 7 a.m. Saturday on KPTK-AM (1090) and 7 a.m. Sunday on KMPS-FM (94.1) include Bellevue writer Robert Dugoni, author of "Damage Control."

The Metropolitan Opera performs Rossini's "The Barber of Seville" at 10:30 a.m. Saturday on KING-FM (98.1).

Liz Sommars' guests on "Conversations" at 6 a.m. Sunday on KISW-FM (99.9), KBSG-FM (97.3) and KKWF-FM (100.7) include Terrence Real, author of "The New Rules of Marriage."

The Sunday edition of Jim French's "Imagination Theatre," heard at 8 p.m. Saturday and Sunday on KIXI-AM (880), includes a new Sherlock Holmes adventure.

P-I reporter Bill Virgin can be reached at 206-448-8319 or billvirgin@seattlepi.com.

Bill Virgin's Radio Beat ... Thursdays in The Seattle P-I