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RAIN 8/5: Webcasters make case for rate parity at Senate hearing on radio royalties

Posted on: 08/05/2009


Webcasters took the opportunity of yesterday’s Senate Judiciary hearing on the Performance Rights Act to remind lawmakers of the dramatic difference between Internet radio royalty rates and those proposed for broadcasters. Testifying on the behalf of webcasters was RealNetworks executive vice president and general counsel Bob Kimball (pictured right), who said “there should be one consolidated rate proceeding that includes all radio services…the Copyright Act should not decide technology winners and losers.”

“Parity would establish royalties that would not discriminate against, or favor competing technology or business models,” Kimball continued, strongly suggesting that Congress adopt the 801(b) royalty determination standard in rate arbitration. “Results of royalty determinations that apply this standard have been fair and have avoided above-market pricing that categorizes the current Internet radio standard,” he said. “The resulting royalties [from the alternative “willing buyer willing seller” standard] have actually driven companies out of business and required remedial Congressional action.”

Senator Dianne Feinstein (D-CA, pictured left) who presided over the hearing, asked the broadcast radio representatives about the disparity between web radio royalties and those proposed in the Performance Rights Act. Pointing out discounts offered to small broadcasters in the bill, she stated, “In contrast, the license offered by SoundExchange to small webcasters with the same threshold of $1.25 million in annual revenue is 12% of revenues. Thus a small broadcaster at the threshold would pay $5,000 in annual royalties, while a webcaster at that same annual threshold would pay an annual royalty of $150,000 — now that’s a big discrepancy. 30 times more. How is this fair? Doesn’t equity and a level playing field require that small webcasters receive the same discount structure that small broadcasters do?”

In response, NAB Joint Board Chairman Steve Newberry pointed to FCC regulations and fees that broadcast radio must pay — and which webcasters are exempt from — to reason that they have “entirely different cost structure…it’s apples and oranges.” Kimball disagreed. “You can make a correlation between the two…although their cost structures may be somewhat different, they’re nowhere close to 30 times different. That is fundamentally unfair.” You can watch the entire hearing here.


There are plenty of Internet radio applications for web-connected mobile phones that let you tune in to your favorite webcasts on the go, but what about other devices that lack cellular connections? A new series of portable routers take an Internet connection from cellular providers like Sprint and make it available on a Wi-Fi network, allowing devices like the iPod Touch or netbooks to access Net radio on the go.

It creates, as Sprint CEO Daniel R. Hesse calls it, “a personal Wi-Fi bubble.” One of these devices, called MiFi, is becoming more and more popular. New York Times columnist Saul Hansell noticed that “on my commuter bus ride to New Jersey, my laptop is picking up hot spots called MiFi, implying that people are already throwing these gadgets in their purses or briefcases so they can surf on the road.” For more on these devices, check out The New York Times’ coverage here.


A Radio World article today cites standalone Internet radio devices’ wider distribution in department and “big box” stores to suggest the products are becoming more of a “mainstream product.” Radio World quotes Bob Crane, president of C. Crane Co. and maker of the CC Wi-Fi Radio, on the size of the market for dedicated Internet radio devices: “I have seen it estimated at around 100,000 units for 2009… It is a growing market.”

That’s not huge, considering the U.S. monthly audience for Internet radio is likely approaching 70 million. But as more and more people grow accustomed to Net radio via the PC and develop brand loyalties, the demand for devices that allow access throughout the home should grow. That growth will be driven, the experts suggest, by “word of mouth, customer referrals and integration with premium Internet radio content providers — Pandora, CBS Radio, Sirius,” as well “hands on experience” with the products.

Grace Digital Internet radios are available in Best Buy, J&R, and Fry’s. Saks Fifth Avenue online (and some stores) carry the Sonoro Internet Radio. Other products, like the Sanyo Wi-Fi Internet Radio, Tangent Quattro and Tivoli Audio NetWorks are available at specialty retailers. (That’s the Sonoro Elements Wi-Fi Internet Radio in the photo.) Read the Radio World article online here.


The iPhone’s new 3.0 operating system allows MP3 and AAC Internet radio streams to play in the Safari web browser, even when the user is using other applications. However, as Jason Snell notes in PC Mag, it’s a real pain to type in a long audio-stream URL, and it’s not really easy to bookmark a stream URL.” His solution is to craft a simple HTML code that creates a personalized icon for the iPhone’s home page, which automatically opens your favorite webcast in Safari. Check out his directions at PC Mag here.

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  1. Hey, no mention of Nancy Sinatra’s giant ‘Radio Free America/please give me more money’ op-ed in the NYT on 08.04.2009?

    alant · Aug 6, 05:21 AM · #

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