Internet radio ““ an often commercial-free forum for independent music ““ is undergoing a revolution as the industry faces new music royalty rates.
On May 15, many Internet radio stations such as Yahoo, National Public Radio and Pandora will have to pay music royalties so high that some are facing bankruptcy.
Though UCLA Radio’s small audience has exempted it from such rates, Christina Gubala of UCLA Radio said she thinks independent Internet radio stations are a key forum for discovering independent musicians and hopes a change to licensing laws does not change UCLA Radio in the future.
The new royalty agreement is designed to pay artists, songwriters and labels on a per-song played basis, instead of just songwriters, as it currently stands.
The same stations that will see increased royalties will also be responsible for retroactive fee payments going back to January 2006, meaning stations such as Santa Monica-based KCRW already owe $330,000, said Rachel Reynolds, KCRW music publicity director.
The increase was made final by the Copyright Royalty Board last week, when all appeals from the Internet radio industry were rejected.
As a result, Internet radio representatives formed a coalition, SaveNetRadio, which kicked off its campaign on Monday to take the issue to the U.S. Congress.
A legislator would have to introduce a bill to reverse the regulations, but the coalition has not found one yet.
Copyright judges and representatives of SoundExchange, a music label royalty collector, said the measure is necessary to fairly pay songwriters and artists, while many against the decision say the fees are a deathblow to a burgeoning industry.
“There’s been dramatic growth (in the Internet radio industry) since we started measuring it 10 years ago,” said Joe Lenski, executive vice president of Edison Media Research, adding that the industry had over 29 million listeners a week last year.
A study by Edison Media Research also found that one in six people in the 18-34 age bracket listen to Internet radio at least once a week.
Gubala, a classics and music history student, said Internet radio is popular because independently the stations are not subject to the same commercialism and music genre monotony of other radio mediums.
“Internet radio has more potential than broadcast radio because we’re very in tune with our communities and our music is extremely diverse,” Gubala, a fourth-year classics and music history student, said.
“There’s no censorship and we’re free to do whatever we want with our music.”
For the same reason, Tim Westergren, founder of Internet radio station Pandora, said the loss of independent Internet radio stations means independent artists will suffer from a lack of national exposure.
Westergren said if this decision is made permanent, it will close almost all existing Internet radio stations, including his own.
“As a former touring musician myself, I’m no stranger to the challenges facing working musicians,” Westergren said in an e-mail pleading listeners for legislative support.
“The issue we have with the recent ruling is that it puts the cost of streaming far out of the range of any webcaster’s business potential.”
The regulations are unprecedented because public media will not be given the reduced royalty rates it usually gets.
Ken Stern, chief executive of NPR, said his station is faced “with a draconian choice of cutting services or raising money that we don’t have.”
Anil Dewan, KCRW’s new media director, said radio on the Internet is important because it is the only place music can have a national and global reach.
Lenski said, despite the conflicts regarding the future of Internet radio, he does not expect the growth and use of Internet radio to decrease.
“I don’t think (higher royalty fees are) going to end online radio, it’s just going to pause growth until the businesses providing it find solid financial footing,” Lenski said.
Gubala said she is not sure how music licensing will work out for UCLA Radio in the future, but hopes its freedom to play what it wants and not rely on commercialization lasts.
“I hope (UCLA Radio) can maintain that purity,” Gubala said.
With reports from Bruin Wire services.