Foolish behavior

This post is a bit off topic, but I have worked on both public radio broadcasts and webcasts, so I have some interest in the absurd royalty hike for internet radio stations that seems like it will be ruthlessly effective in smothering them out of business.

Under the new rules, the retroactive royalties owed by almost all of today’s independent webcasters will be greater than their total revenue. Wait a second,

How can the value that music brings to webcasters exceed webcasters’ revenue? Of course, the value of music can’t be made so low as to ensure every webcaster makes a profit; but isn’t it equally ridiculous to raise that value to ensure that no webcaster can survive?

Could the Copyright Royalty Board have been unaware that its decision would have lethal financial consequences for most webcasters? Or could it be their intention was to shut down the large majority of today’s channels, to leave the entire market to enormous media companies chasing high-profile advertising? Either way, the effect a purely mass-market approach will have on webcast playlists will likely be similar to the effect it has had on the quality of traditional radio.

The internet offers many strong advantages over traditional radio: it lacks expensive and paralyzing FCC regulations, while affording a lower barrier to entry, infinite bandwidth, and a more precisely targeted audience. The fact that internet radio stations can survive with little administration and technical infrastructure means stations can be numerous, small, targeted, and innovative. In contrast, a payola-ridden and highly politicized scene on the airwaves has led to less diversity in programming than ever before. In my opinion, there is very little good music on traditional radio — something that anyone with a modicum of taste can hear absolutely clearly.

I do not know if webcasting helps or hurts the status quo of the recording industry, and I don’t care. I don’t have a stake in it anymore. However I do believe that webcasting brings higher quality music into my life. People seem to like internet radio, so the labels should find a way to profit from the quality that internet radio uniquely offers rather than change the product in a way that will reduce its appeal. Otherwise they are missing a lucritive business opportunity, and commit the unforgivable sin of stamping out a vital part of many people’s musical enrichment. Just another example of foolish behavior on the part of the recording industry I suppose.

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One thought on “Foolish behavior

  1. Unfortunately, the recording industry is (has become?) a spoiled child. They realized that they aren’t able to make the same kind of money they used to make. Because of technology. What’s their solution? Taxes and law suits. Trying to quiet every single attempt at creating something good, something innovative. Remember the Microsoft monopoly saga? Different context, sure, but a lot of similarities in my opinion.

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