Has Internet Radio Been Saved?

Pico Wi-Fi Radio

Some of you may recall that there was a lot of hooting and hollering about the end of “Internet Radio” way back in 2007 when royalty rates for webcasters were increased by an unprecedented 300 to 1200 percent. Well since then, despite the fact that radio is still available on the Internets, the new higher royalty rates have had a crippling effect on the industry:

Since the Copyright Royalty Board (CRB) increase royalty rates for webcasters 16 months ago, there has been an immediate and devastating effect on Internet radio services. Three of the most-listened-to services (AOL Radio, Yahoo! Radio and Pandora) have either left the business, limited listener access to their services, or announced they are likely to shut down in the near future if royalties are not significantly reduced. [SaveNetRadio.org]

The big news today is that President Bush (yes, the same one that is currently very unpopular) is about to approve a bill that will pave the way for webcasters to negotiate new royalty agreements with copyright owners retroactive to 2005, which could potentially resolve all future disputes through 2015. (Though nothing I read in the following paragraph makes it clear that royalty rates will definitely be reduced, most people seem to think this bill is a good thing anyway.)

The House of Representatives on Saturday and the Senate late on Tuesday passed H.R. 7084, the Webcaster Settlement Act of 2008, which will allow for Internet radio stations to negotiate royalty rates with the copyright holders and Webcasters. The bill is headed for President Bush’s expected signature.

It would replace a March 2007 ruling by the Copyright Royalty Board (CRB), which jacked up royalty rates on Internet radio stations to unmanageable levels. While terrestrial radio stations pay no royalties, Internet radio would get smacked with a sliding scale rate that could hit 70 percent of their total revenues. [InternetNews.com]