Subscribe free to our newsletters via your
. 24/7 Space News .




INTERNET SPACE
Dissonance over US bid to cut Web radio royalties
by Staff Writers
Washington (AFP) Oct 14, 2012


A push to lower music royalties paid by Internet radio has created political disharmony in Washington.

The row began to heat up in September, when a group of lawmakers introduced the Internet Radio Fairness Act to equalize royalty payments paid per song for digital radio, whether it is transmitted over the Internet, cable or satellite.

The proposal was swiftly endorsed by Pandora Media, the biggest US Internet radio firm, which has complained of unfair treatment by the current royalty system.

Pandora said the bill would "establish a level playing field for Internet radio" and end a "fundamentally unfair" system that requires it to pay some 50 percent of its total revenue in royalties.

That compared with less than 10 percent paid by satellite radio firm SiriusXM, which benefits from a preexisting rate allowed under a 1998 law.

Pandora stepped up its campaign in the past week, asking users to press lawmakers to act on the bill.

"As a musician myself, I believe artists should be fairly compensated, but the current system hurts everybody, including artists," said Tim Westergren, co-founder of Pandora, in a video appeal to its members.

Sponsors of the law say the current royalty system was established before anyone imagined the potential for Internet radio.

Royalty rates for Internet radio are set by a panel of three copyright judges who determine the "marketplace" rate. That differs from a standards of eight percent set for satellite radio and 15 percent for cable music.

A sponsor of the bill, Representative Jason Chaffetz, said the proposal is backed by organizations including the Digital Media Association, Computer and Communications Industry Association and the Consumer Electronics Association.

"Internet radio should be a boon to the entire audio market -- from the creators, to the distributors, and of course to the consumers -- but instead it is barely hanging on," Chaffetz said.

"Congress enacted the royalty rate standard for Internet radio 14 years ago, when Internet radio was barely a concept."

But the measure is drawing fierce opposition from musicians and others who could see royalties slashed.

Ted Kalo, executive director of musicFirst, a coalition of record labels and artists, said musicians would pay the price for the bill.

"The current law reflects the free market rate," Kalo said. "We should not impose a government-mandated below-market rate, which would require artists to give up the fair market value of their work."

If any change is made to law, Kalo said those benefiting from a lower "grandfathered" royalty "should be brought up to the market rate" and that traditional radio -- which is not covered in the proposal -- should lose its loophole on royalties.

Hal Ponder of the American Federation of Musicians said the bill "would slash paychecks to artists and labels simply to line Pandora's pockets."

But Pandora's Westergren said the bill "will drive massive investment in the space," and create a wider audience for Internet radio, helping artists in the long run.

"Imagine the impact on artists if this industry grew to become 25 percent or even 50 percent of radio listening," he said in a blog post.

A report by the research firm Trefis said that without the bill, Pandora's business model could become unsustainable but that if the measure passes, its value could double.

Trefis said Pandora "cannot leverage a higher base to negotiate favorable rates directly with the copyright owners" and "may not become profitable unless it finds a way to offset these costs."

John Villasenor, a senior fellow at the Brookings Institution's Center for Technology Innovation, said there is a rationale for ending the "onerous rates" for royalties which "have risked driving innovative companies out of business."

Villasenor said in a research report that cutting royalties could help Internet radio thrive, driving more customers to listen to digital music broadcasts.

"This would lead to more revenue for broadcasters, songwriters, recording artists and record labels," he wrote.

But analyst Richard Greenfield at BTIG Research, said Pandora should not get a special deal in Congress for a model that protects its "user experience" by limiting ads.

"The reason why companies such as Pandora pay such high royalty rates as a percentage of revenues is because they severely limit audio advertising to protect the user experience and keep people on the platform," he said.

"Pandora is effectively asking the government to intervene and reduce its cost structure, helping it remain a viable business because it knows its business model only works while running limited advertising."

.


Related Links
Satellite-based Internet technologies






Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks
del.icio.usdel.icio.us DiggDigg RedditReddit GoogleGoogle




Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News





INTERNET SPACE
Third of world's population has Internet: UN
Geneva (AFP) Oct 11, 2012
More than a third of the world's population is online while mobile phone uptake increased by more than 600 million in 2011 to around six billion, a UN agency said Thursday. But the International Telecommunications Union (ITU) highlighted huge disparities in the cost of services, with the poorer parts of the world tending to pay the most. "On the back of the increase in broadband services ... read more


INTERNET SPACE
Russia to launch lunar mission in 2015

Moon water could have solar source: study

Solar wind particles likely source of water locked inside lunar soils

Russian moon mission said funded, ready

INTERNET SPACE
Robotic Arm Tools Get To Work On Rock Outcrop

Curiosity Preparing for Second Scoop

Mars rover makes surprising rock find

Meteorite delivers Martian secrets to University of Alberta researcher

INTERNET SPACE
Austrian breaks sound barrier in record space jump

Austrian daredevil to make new space jump bid

Red Bull set for marketing history with supersonic jump

Austrian freefaller inspires awe in watching millions

INTERNET SPACE
China launches civilian technology satellites

ChangE-2 Mission To Lagrange L2 Point

Meeting of heads of ESA and China Manned Space Agency

China Spacesat gets 18-million-USD gov't support

INTERNET SPACE
Crew Unloads Dragon, Finds Treats

Station Crew Opens Dragon Hatch

NASA and International Partners Approve Year Long ISS Stay

Year on ISS planned ahead of manned Mars mission

INTERNET SPACE
Proton Lofts Intelsat 23 For Americas, Europe and Africa Markets

India to launch 58 space missions in next 5 years

SpaceX Dragon Successfully Attaches To Space Station

Another Ariane 5 Enters Launch Campaign Queue

INTERNET SPACE
Nearby Super-Earth Likely a Diamond Planet

Candels Team Discovers Dusty Galaxies At Ancient Epoch With Hubble Space Telescope

Large water reservoirs at the dawn of stellar birth

Comet crystals found in a nearby planetary system

INTERNET SPACE
Amazon offers refunds following e-book settlement

Shares in China's ZTE slump after profit warning

U.N.: 6 billion cellphone subscriptions

Swedish breakthrough in space on NASA satellite with electronics from AAC Microtec




The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement