From the July 15th issue of Newsweek: "Jim Atkinson is cannon fodder in the digital-music wars. Five years ago he and his wife, Wanda, began 3WK, a virtual radio station that streams tunes of their beloved alt/indie rock to listeners over the Internet...

"[Internet radio is] a rich universe of more than 10,000 alternative Web stations, many of which cater to narrow if not bizarre taste...

"It’s the exact opposite of broadcast radio, where the vast majority of stations are owned by a few media giants, who restrict playlists to the lowest-common-denominator ears.

"In the Webcast world...it’s possible for Jim and Wanda Atkinson to run one of the more popular sites — and one day, they hope, a profitable ad-supported business...

"Possible, that is, until Oct. 20. That’s the day the bill comes due for a government-imposed performance fee brought about by pressure from the recording industry...

"Kurt Hanson, publisher of Radio And Internet Newsletter, has calculated that the Oct. 20 bill due for all Webcasters represents several times the total revenue of the entire industry. The folks at the Recording Industry Association of America defend this on the ground that without music, you have no Internet radio.

"This is like the government’s deciding to tax you three times your gross income, because you really, really benefited by living in the U.S.A. Meanwhile, for broadcast radio there’s no performance fee at all...

"The apparent irony is that Webcasting seems like something that the record labels would want to nurture, not smother in the cradle. There’s no Napster problem... Just like real radio, it’s free exposure for artists, especially ones that have difficulty getting air time in the cookie-cutter world of FM radio.

"And Webcast listeners find it easy to buy what they like: musical cuts are clearly identified, and often there are direct links to allow an instant CD purchase. (Atkinson claims that he’s generated more than $20,000 in CD sales.)..

"But SoundExchange’s Simson says that the labels don’t view Webcasting as a promotional tool like broadcast radio... He also worries that the narrow focus of Webcasts might poach sales: if someone can stream an 'all Bruce all the time' Web radio station, he says, their Springsteen craving might be forever satisfied. Seems to me, though, that anyone who tunes in to that station would snatch the Boss’s new CD the day it hit the stores.

"So why are the record labels taking such a hard line? My guess is that it’s all about protecting their Internet-challenged business model. Their profit comes from blockbuster artists. If the industry moved to a more varied ecology, independent labels and artists would thrive — to the detriment of the labels, which would have trouble rustling up the rubes to root for the next Britney.

"But...if enough...outraged listeners stream their objections to legislators, maybe Internet radio can be saved. "

You'll want to read Levy's entire article in the July 15 print edition of Newsweek, or online here.

...

... This is one of the best articles yet on the subject, summarizing the key issues much more clearly than we've ever managed to do here at RAIN. A quick note on Simson's arguments here: The more "irrational" sounding one -- "there's no evidence that Internet radio boosts record sales" -- was actually the conclusion reached by the CARP panel. While it's so unintuitive as to be almost ridiculous, the arbitrators said neither party had provided solid evidence one way or another. The second point, the hypothetical "all Bruce all the time" station, is so misleading that I'd have to give Simson the benefit of the doubt here, and guess that it wasn't him but the author Levy who specifically came up with that example. Here's why: Someone in Simson's position would know full well that an "all Bruce" station wouldn't be eligible for the compulsory license, as it would be in gross violation of the "performance complement" element of the DMCA. It's been my experience that the hypothetical Simson likes to use is a "Chicago Blues" station. (Although it's incredibly hard to imagine that the existence of a "Chicago Blues" station would hurt sales of blues albums!) -- PM ...

Thanks to all the fine companies (including those listed below) who agreed to be part of our recent "RAIN Vendor Guide (Ver. 2.0)" issue. If you didn't have a chance to spend time with it yet, you can access the issue here.

The U.S. Copyright Office has published in the Federal Register their full final rule and order on webcasting royalty rates. The document sheds quite a bit of light on the reasoning used by the Register of Copyrights and the Librarian of Congress in their decisions. Please see the document online here, and then look for analysis soon in RAIN. Thanks.

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"There must be an amendment to the DMCA..."

Quoting Hilary Rosen from the Plug.In conference: "This is not a mom and pop issue, this is a business model issue."

Exactly correct. And the issue centers around the fact that the recording industry refuses to adapt and/or enhance THEIR business model for the Internet. The only change the RIAA wants to make is to use their lobbying power in Washington to see to it that they have complete control of an entire broadcast medium. This is unacceptable.

With due respect to reps Inslee and Boucher, new legislation that provides a "short term remedy" until the next CARP is convened is not sufficient. This would only extend the uncertainty, and continue to keep prospective advertisers and investors in our medium away. There is tremendous interest from these entities, but thanks to the hard lessons learned by so many in the "dot bomb" era, they will not move until they can be reasonably sure that their investment and advertising dollars are secure.

There must be an amendment to the DMCA, and it must happen soon. Promotional value must be recognized and the performance royalty fee must be completely eliminated. If it takes too long, and too many webcasters have to shut down because of the uncertainty, the RIAA will ultimately achieve their true goal of complete control. Our representatives in Washington must not let this happen.

"It IS a Mom-and-Pop issue!.."

Ms. Rosen must be REALLY dense if she thinks that this issue is a "business-model" issue!

Sorry, Ms. Rosen, but it IS a Mom-and-Pop issue!!

You're trying to shut down small, independent webcasters in order to force the same consolidation on the Internet Radio industry that you've done to the terrestrial radio industry!

I, as an avid Internet Radio listener, DON'T like what you want to see happen!

I have once again gone to the "Voice Of Webcasters" site and sent a fax to my Senators & Congressman, and I hope they don't listen to you or your corrupt, deep-pocketed cohorts! I hope they listen to US, the citizens whom they happen to work for, and SAVE INTERNET RADIO as it now is!!

I encourage EVERYONE reading this newsletter to go to the Voice Of Webcasters website RIGHT NOW and send the fax to your Senators and Congressman!

Let's show Ms. Rosen and her RIAA cohorts that we WON'T stand for their monopolizing practices any longer!!

"We decided to go with Live365..."

I noticed that when we shut down at the end of the day on June 30 that I was posted under the "Silenced by royalties." I greatly appreciate the recognition and having it posted there. I just wanted to let you know that we decided to go with Live365 to continue streaming since they cover the royalty fees, and returned to the air on July 9th.

Thanks for providing a great recourse for us with RAIN and SaveInternetRadio.org! The information is vital and I am glad that you have taken the time to provide it to us all.

Here is a growing list of webcasters who, because they don't feel they can manage webcasting royalties in a viable business, have decided that it's in their best interests to silence their streams. (We thank them for their hard work and dedication to their audiences and the industry, and wish them luck in their future endeavors...)
3FM/Netherlands	All80s.com	AudioCandy.com
BlueMars.org	Celtic Heritage Webradio	Chez Whitey
Entercom stations	Good Time Oldies Radio	Greater Media stations
GrrlRadio	HitRadio.biz	Hot Hit Radio
IdahosCast.com	KDFC/San Francisco	KKDV/San Francisco
KOIT/San Francisco	KTRS/St. Louis	Lotus Radio stations
McClure stations	MonkeyRadio.org	MYNDFK.com
NetRockRadio.com	NextMedia stations	Perkigoth.com
Powerrocks.com	Progrock.com	Radio1/Netherlands
RadioCentral.com	Radio Free Akron	Radio Free BD
Radio Free Tiny Pineapple	RadioMaxMusic
RKNA: Aural Arcana	SavageRockRadio.com	Simmons Media stations
SomaFM.com	StarDogRadio.com	TagsTrance.com
The City Radio	therockfm.com	The Zoo
WAAF/Worchester	WMMR/Philadelphia	WOVRadio.com
XTC Radio	Yahoo! Radio stations
Have we missed others? Use the feedback form above or e-mail us here.