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RadioParadise's statement to the Senate Judiciary Committee

Posted on: 08/01/2007

PO Box 3008 | Paradise, CA 95969 | 530-872-4993

Written statement of William Goldsmith, CEO, Radio Paradise, Inc.

A Statement for the Record of the July 29, 2008 Hearing on “Music and Radio in the 21st Century:  Assuring Fair Rates and Rules across Platforms”, U.S. Senate Committee on the Judiciary.

Radio Paradise is a popular Internet radio station that caters to an audience that appreciates a diverse variety of music style and genres, blended together by a human DJ. I’ve worked in the broadcast industry for over 35 years, and what I am doing here at Radio Paradise does not differ in the slightest from what I did on FM stations.

What I do is just radio, pure and simple. I pick songs I think my listeners might enjoy, and put them together into what I think will be enjoyable sequences, and every once in a while I talk about what people are hearing. The recording industry, back in the 90s, was able to convince a lot of people that if radio was happening over a digital circuit of some kind rather than via analog transmissions. But the experience is exactly the same. Radio is radio.

In the course of my business I meet many recording artists, from the obscure to the very famous. I have yet to meet one that asked me not to play their songs on the radio, who claimed that they were somehow hurt by having that happen.

Of course not. If an artist gets played on the radio – be it FM, Internet, or whatever – they get heard. People decide they like them and will go to see them the next time they’re in town. They buy their CDs, or pay for downloads (yes, many artists have proven that people will pay for downloads if they respect and appreciate the artist).

The idea that an artist gets harmed by radio airplay is absurd. I doubt that the recording industry will be able to produce an artist willing to stand in front of Congress and make such a statement. They’ll talk about how they need to be compensated for lost income due to the declining sales of physical CDs, how legal downloads are just not filling that gap.

That may be so. But are declining sales of CDs, and the disappointing sales of legal downloads, the fault of too much radio play? I’d love to see the representatives of the recording industry try to make that case. Should radio be penalized for the failure of the recording industry to adapt to changing market conditions? That hardly seems fair.

Internet Radio should be the future of broadcasting

Internet radio has the potential to explode in popularity. The day has finally come when portable net-connected devices can receive Internet radio broadcasts. Millions of people are tuned in to Internet radio broadcasts at this very moment, enjoying a variety of choices in programming that can not be duplicated on the FM band or by the satellite radio services, due to lack of spectrum space.

Yet Internet radio is not the thriving business that by all rights it ought to be. Why? Because lobbying efforts by the recording industry succeeded in pushing through a punitive and totally unrealistic standard for determining royalties paid by Internet radio station for the use of sound recordings.

In his statement, Kurt Hanson nicely presents all of the facts and figures that illustrate the impact of the current royalty rates on Internet broadcasters. I’ll sum it up from my perspective: fear and uncertainty around copyright royalties (due to the consistent position of recording industry representatives that the sky-high rates currently paid by Internet radio are not nearly high enough) have made it impossible for anyone in the Internet radio industry to secure any sort of outside investment or corporate credit.

The potential for growth of an entire should-be-vibrant industry has been cut off by the lobbying efforts of the recording industry. Money is leaving this industry, right at the point when it’s needed the most.

Now it’s FM/AM radio’s turn?

It would be great if Congress were now debating the fairness of applying a crippling royalty to the Internet radio industry. We hope at some point you will be willing to do so. Now, however, you’re debating the wisdom of applying this same tragically flawed standard to the rest of the US broadcast industry, the operators of FM and AM radio stations.

If the imposition of such a royalty were a success in the areas where it has already been applied, such consideration might make more sense. However, by all reasonable standards, the effect of the current performance copyright royalty rates on Internet radio stations has been an unmitigated disaster. An industry that should, by all rights, be vibrant and growing is dying on the vine instead.

Is that the future you’d like to extend to all US broadcasters?


William Goldsmith
Radio Paradise, Inc.

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