Killing Internet Radio

I have been thinking about the new internet radio fee structure. I think the Copyright Royalty Board is making a mistake by change. I am not saying that the fees cannot go up, but I think it is really early in the life of internet radio for the fee structure to change to radically. This is not the case where there are internet radio companies that are just raking in the revenue and the copyright royalty holder and being left out in the cold.

I am not sure who is lobbying for this change, but my guess is that there will be few winners here. I think that the record companies might win, but individual royalty holder might lose. Increasing the fee structure is likely to send small internet broadcasters out of business. There is a good chance that the increase payment from the other broadcasters will not make up for the revenue that will be lost by sending smaller companies out of business. It will be bad for smaller record labels and smaller artists. They will be losing the venue to be heard and the revenue from being played on smaller internet broadcasters.

If internet radio stations go away, I think this will encourage people to pirate music. A lot of these internet radio stations free to listen to. If they are not around many of those listeners will find other no cost ways to find music. What little money is going the the royalty holder would go away.

I find this to be a little funny in the light of the XM and Sirius merger. One of the arguments for why the merger would be fine is because there is so much internet broadcasting out there. My guess is the XM/Sirius will not change their stance.

I do not listen to much internet radio. I have way too much music to listen to already. I want there to be internet radio to be out there. The promise of the internet is that size does not matter. I will be able to find very specific niches out there. This change is designed to kill off some of those niches out there. That is a bad thing. In the end internet broadcasters will set up outside the US. In the US there is no door on the internet to block them. It is bad for business. That is reason enough for the US not to make this mistake.

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