From a Seattle Times editorial: "The transformative effect of the Internet on the music industry has opened up new avenues for musicians and listeners. Independent musicians and labels can now reach audiences in their own way. Fans can use the Internet to discover new acts not found on corporate radio, and interact with bands as never before.

"All this musical freedom has put the entrenched entities of the music industry — conglomerate record labels, corporate radio and network providers — on the offensive. Their fight against the Internet now incorporates a conquest of control.

"The attack is multifaceted. Internet radio is in danger because of a proposed new royalty scheme that would wipe out the budgets of many Internet stations. The elimination of Internet radio would allow for the big record labels and corporate radio to continue their cozy relationship without any competition…

"Internet radio has become an issue for Sen. Maria Cantwell, D-Wash., and Rep. Jay Inslee, D-Bainbridge Island. Inslee is sponsoring a bill to help Internet radio with royalties.

"Cantwell is on the Senate Commerce, Science and Transportation Committee [RAIN coverage here]. A Wednesday hearing on the future of radio gave the committee a chance to hear from independent record owners and musicians about how important an open Internet is to communities…

"Tim Westergren of Pandora Media explained the reach of Internet radio. Nielson/NetRatings, he said, have shown ‘that Pandora listeners are three to five times more likely to have purchased music in the last 90 days than the average American. Similarly, Pandora is one of the top referral sites for music purchasing from both Amazon.com and the iTunes Music Store.’

"He went on to explain that his station would suffer under the new proposed royalty rates.

"‘Our royalty in 2007 is now likely to reach over $6 million, almost 50% of our total revenue. And per-listener, per-track royalty rates for Internet radio are scheduled to climb an additional 27% in 2008, and 29% more in 2009.’

"Ouch.

"The demise of Internet radio would be a loss felt not just by musicians and their fans. The choking of the Internet by a few large companies will stall American innovation and creativity."

Read this entire Seattle Times editorial online here.

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