x An editorial in today's Chicago Tribune marks the addition of another major newspaper to the chorus of support for webcasters and independent artists via the Internet Radio Equality Act. Read other recent newspaper editorials in support of the IREA here, here, here, and here. x

"Terrestrial radio only pays royalties to composers. Performers are not compensated, because radio stations argue that drawing listeners to their music is essentially free advertising.

"But Internet and satellite radio broadcasters have to pay both the composers and the performers. Satellite radio does this by paying a flat fee of 7.5% of revenue. Until now, small Internet radio broadcasters, too, have been able to pay royalties as a percentage of revenue.

"In March, however, the Copyright Royalty Board scrapped that model, instituting a per-song, per-listener basis for royalties, set to take effect July 15...

"John Simson, executive director of SoundExchange... argues against that legislation, saying that the CRB's rules protect artists. Not all artists, though, want to be protected that way.

"According to a letter that 18 jazz luminaries sent to Congress, 37% of the music played on Internet radio comes from independent artists and labels [previous RAIN coverage here].On traditional broadcast radio, that falls to 5%. So fledgling musicians, who often find it nearly impossible to gain airtime on commercial radio without the backing of a major record company, increasingly rely on Internet radio to help cultivate a wider audience.

"Streaming audio of religious services, which intersperse sermons with gospel music, could also be silenced. National Public Radio might do away with Webcasting its jazz programming. Soldiers, many of whom use Web simulcasts of hometown radio stations to keep up with the goings-on while they're posted abroad, would lose out as well if the number of Internet radio outlets shrinks...

"If SoundExchange doesn't move expeditiously, Congress will need to act — and fast. Otherwise, July 15, in the words of Don McLean, will indeed be the day the music died."

Read the entire editorial at the Chicago Tribune.

From an Arbitron press release: "Arbitron today released a 30-market analysis of diarykeeper entries for Internet-based listening to AM/FM radio stations.

"In the 30-market study, diary entries for Internet listening to AM/FM radio stations grew substantially in Fall 2006 accounting for 20,331 unweighted quarter-hours. In Spring 2006, only 4,684 quarter-hours were noted in survey diaries.

• The increase in entries coincides with implementation of new diary instructions (effective Fall 2006) that identify Internet and satellite radio as sources of listening...

• Despite the growth, Internet listening to AM/FM radio stations still accounts for less than 1% of un-weighted quarter-hours overall...

• Diarykeepers that recorded Internet listening to AM/FM radio stations tend to be older, male and Other (not black, not Hispanic).

"Sixty-six percent of the quarter-hours that included an Internet identifier for an AM/FM station identified a local station ...

"AM/FM radio stations are credited for their Internet listening in Arbitron’s ratings reports only if the station’s stream is a 100% simulcast (including all programs and commercials, for all of the station’s broadcast hours.)...

"Note: Listening to Internet-Only radio (online radio that is not broadcast on over-the-air radio stations) is not included in the Arbitron local market radio ratings and is not included in this analysis."

Read Arbitron's press release online here.

...

... Inside Radio, in their coverage of this story, missed an important qualifier in Arbitron's press release, which I have added below in all caps: "Arbitron’s analysis shows online listening TO AM/FM SIMULCAST STREAMS is still primarily an in-market service with 67% of quarter-hours coming from a diarykeeper’s local market. In spite of triple-digit gains in the number of people listening to station simulcasts online – it still accounts for less than 1% of all radio listening." In other words, Arbitron's analysis didn't look at reported listening to Internet-only radio (LAUNCHcast, Pandora, Live365, etc.) at all. It's certain that they comprise much more than 1% of all radio listening. Still yet, .47% of diary mentions is not insignificant. Chicago is about a $500 million radio market, so there's about $2.5 million in action at stake in terms of AM/FM simulcast streams. That's not meaningless. On the third hand, this raises the point that listening to an AM/FM simulcast on the web is not a particularly compelling experience. There's no value-add. We're not talking about new genres of music. Long spot breaks need to be covered somehow. And interactivity/customization is not possible. -- KH ...

From Radio World online: "The recent brouhaha spawned by the Copyright Royalty Board’s revised rate structure for sound recording rights on Internet  radio has had an important secondary effect: It has drawn attention to a seeming imbalance in royalty rates paid by different forms of radio...

"In essence, the statutory license for sound recording rights established by the U.S. government allows the largest and most profitable segment of the radio market to pay nothing to rights holders while the emergent players (satellite and Internet radio) pay a substantial — and likely increasing — amount for the same rights.

"A reasonable outsider might see this as a serious disparity...

"Radio has benefited from the license arrangement, and it has survived challenges. But in the past,terrestrial radio never had such closely fashioned competitors working under such dissimilar rules. (The last time this came up, the industry didn’t need the 'terrestrial' modifier...)

"Some wonder how much appetite major record labels will have to challenge the status quo for terrestrial radio; but under the new CRB process, this issue is likely to come up, perhaps early next year.

"We expect broadcasters to mobilize strongly against this. NAB’s David Rehr knows there’s a risk and used his recent NAB keynote to ramp up the rhetoric against labels [previous RAIN coverage here].'Imagine the brazen greed it takes for the record companies to expect us to pay them for the honor of marketing and promoting their artists’ music,' he said. 'It would make much more sense for us to charge them for our promotional efforts,'...

"Meantime, stations would do well to learn from the current hubbub among Internet broadcasters and ask themselves what would happen if the 'free music for free promotion' understanding with labels were to unravel.

Read the entire article at Radio World online.