Natebot
World's Leading Natebot

The Washington Post is reporting that increasing royalty rates are likely to kill off the hundreds of small independent web broadcasters of internet radio.

The heyday of advertising-free Internet radio might be coming to an end. Simson [executive director of the organization that collects and distributes royalties] says small operators who play music and don't try to sell ads "will have a hard time paying the rate" -- a change about which he's not shedding tears.

This isn't good news for those of us who enjoy donation-driven ad-free stations like Soma fm. Sure soma fm could change their business model to include ads but it is questionable that the guys south of Market street in San Francisco are interested in chasing the all-mighty dollar instead of providing us with music as their hobby . This is doubly true for hobbyist broadcasters dedicated to providing niche services. No more broadcasts of rare recordings of Mongolian throat-singers since only Britney brings in the ad dollars.

Wait, you might say, artists deserve compensation for their work. If a broadcaster is making money (even from just donations) off of playing music, shouldn't the artist get a slice of the pie? If you feel this way, would if surprise you to hear that over-the-air broadcasters do not pay this fee to artists?

The crux of the matter is the copyright law assumed that internet radio is transmitting a perfect copy of the recording, and thus the broadcaster should pay a royalty to the artists for distributing music - whereas over-the-air broadcasters are exempt from this fee. However, we all know that internet radio is not a perfect copy - the sound is compressed into 'lossy' mp3 or WMA format, is sent at 128kbps at best (usually less.)

Heck, when you "buy music" from Itunes or the Zune Marketplace (or eMusic or where ever) you are not getting a perfect copy (even if we consider optic storage like CD 'perfect') though you aren't buying the music just the rights to play it in certain circumstances.

Simson appears to be going to bat for artists and it seems he's not concerned about freedom of choice for listeners.

"Is 10,000 stations the right number?" asks Simson of SoundExchange, which sought the higher royalties. "Does having so many Web stations disperse the market so much that it hurts the artist? What's the right number of stations? Is it 5,000? Is it less? Are artists better off having hundreds of listeners on lots of little stations, or thousands of listeners on larger stations?"

To me this is a colossal failure of imagination. Pitting artists' royalties vs. listeners' choice is a false dichotomy. There is no "right number of stations" just as there is no "right number of artists." Just imagine Simson's argument from the point of view of listeners:

Is 10,000 artists the right number? Does having so many musicians flood the market so much that it hurts the listener? What's the right number of artists? Is it 5,000? Is it less? Are listeners better off having hundreds of artists on lots of little stations, or a few artists on larger stations?