BY DANIEL MCSWAIN
Mainstream press outlets have begun to latch onto the severity and importance of the CRB ruling, providing robust coverage of the ruling's mandates and how the decision stands to silence the majority of the Webcasting community.

We've compiled the list below as a resource for interested and concerned readers to learn how this serious issue is being handled by national news outlets, including the Associated Press.

It's encouraging to see this rapid response from other journalists. Just today, for example, the city of Chicago awoke to an 80-point headline at the top of the Business section of the Chicago Tribune: "Web Radio Reels From Rate Ruling". We'll continue to update this list as more coverage emerges.

	Royalty "burden" could silence online stations
	Royalty payments would hurt all varieties of webcasts
	"Obscure group" of judges may kill Internet radio
	Startup companies would feel "greatest impact" (via the Associated Press)
	Industry "revving up for a fight" with CRB
	Growing webcast industry would be stunted
	Webcasters not "getting much sympathy" from SoundExchange
	Ruling "ignores realities of the radio world"
	Webcast audiences faced with "sounds of silence"

'They've been saying this since 2002, that they were going to go out of business,' said Willem Dicke, a spokesman for SoundExchange. 'Instead what's happened is the industry has grown tremendously.'"

What Dicke (pictured, left) ignores is that smaller webcasters (i.e., those not owned by large media groups with various revenue streams, like Yahoo! LAUNCHcast, AOL Music, Clear Channel) in fact would have gone out of business if it weren't for a last-minute settlement reached at the urging of then House Judiciary Committee chairman James Sensenbrenner (R-WI).

It was the "Small Webcaster Settlement Act" (SWSA), passed and signed into law in late 2002, allowed these independent webcasters to pay a fixed percentage of their revenue, as opposed to a "per-song, per-listener" fee.

In the CRB decision, there no longer exists a percentage-of-revenue option for any webcaster.

SoundExchange executive director John Simson (pictured below) alluded to this fact when he told the L.A. Times (here) that "the new fees simply leveled the playing field for Internet radio..."

However, he conflates the situation faced by the smaller independent webcasters (who are seeing tremendous jumps in their royalty obligation) with the ability of large media companies to handle these royalties. He told the paper "the hundreds of Internet radio services include corporate giants such as Yahoo and Clear Channel Communications Inc. that can afford the higher fees."

Fine. Of the hundreds of webcasters, Simson has named two that can theoretically afford the higher fees.

...and say webcasters have
enjoyed "tremendous growth"
Explaining his description of an industry that has "grown tremendously," SoundExchange spokesman Dicke (in AP's coverage) points to "rapid growth" in recent years of webcasters' advertising revenues "from about $50 million in 2003 to $500 million last year, giving Webcasters enough resources to cover the new royalty rates."

Dicke either fails to cite the source of this figure, or AP doesn't report it. It presumably comes from an estimate in a January J.P. Morgan study (here) apparently based on major terrestrial broadcasting companies.

However, this publication knows of no webcaster that's seen anywhere near a 10-fold increase in ad sales over the past 3 years, or a 500% jump in CPM (which the analyst also estimates) in that same time frame.

Furthermore, our own analysis of the Internet radio audience size multiplied by the amount of advertising sold per hour multiplied by current CPMs leads to a total estimate of industry revenues that's nowhere near $500 million.

What's more, as financial statements that prove webcasters are eligible for the "small webcaster" rate are regularly submitted to SoundExchange, their reliance on an analyst's estimate of webcaster revenues (when they actually have hard data at their fingertips) seems misleading.

BY PAUL MALONEY
Lawmakers are likely to get webcasters' first official response to the Copyright Royalty Boards's (CRB) license fee  determination today in a House subcommittee hearing.

The House Commerce Committee's Subcommittee on Telecommunications and the Internet convenes this afternoon for the "Digital Future of the United States: The Future of Radio" hearing.

[Listen to the webcast of the hearing, scheduled to begin at 2:30pm ET (1:30pm Central) from the Department of Energy and Commerce website.]

Scheduled to testify is Bob Kimball, SVP of RealNetworks, who will represent the Digital Media Association (DiMA), a trade organization for major online audio and video content providers like AOL, Apple, Live365, RealNetworks, Microsoft, and Pandora.

With today's deluge of press coverage and the onslaught of web radio listeners communications to House and Senate members, it's likely the webcast royalty rates will receive substantial attention at today's subcommittee hearing.

Others scheduled to testify on other matters include Sirius CEO Mel Karmazin and Greater Media CEO Peter Smyth.

Though National Public Radio, meanwhile, is reporting that today's hearing would deal "specifically (with) the royalties that Internet radio stations pay to record labels for streaming music," RAIN has not be able to verify that, nor have we seen that reported in other media.