CEA

Groups representing the consumer technology industry and major online media companies, as well as Internet radio's largest webcaster, have now publicly supported the Internet Radio Fairness Act, introduced to both houses of Congress today by Reps. Jason Chaffetz (R-UT) and  Jared Polis (D-CO) and Sen. Ron Wyden (D-OR).

Michael Petricone, senior vice president of government and regulatory affairs, Consumer Electronics Association (CEA): "Under today’s outdated rules, Internet radio providers are forced to pay a significantly larger percentage of royalties than their competitors," commented CEA SVP/Government and Regulatory Affairs Michael Petricone. "This irrational and unfair royalty system hinders investment and innovation in Internet radio. The changes proposed by the Internet Radio Fairness Act are simple and long overdue... We urge the House and Senate to pass the Internet Radio Fairness Act as quickly as possible."

The CEA represents two-thousand consumer technology companies and produces the International CES, the world's largest consumer technology tradeshow.

In Pandora's statement supporting the bills, company founder and Chief Strategy Officer Tim Westergren said, "Royalty rates for different formats of digital radio are astonishingly unequal... Last year, Pandora paid roughly 50% of its total revenue to royalties, more than six times the percentage paid by SiriusXM." He added, "A more equitable rate structure would drive investment and innovation, bringing greater choice for consumers, and ultimately greater revenue for performing artists."

Pandora remains the far-and-away leading webcaster in Internet radio, with nearly 1.3 million "Average Active Sessions" in the U.S. only (M-Su 6a-12M), according to Triton Digital Webcast Metrics (here). This is seven times that of the nearest competitor, Clear Channel, and represents listening growth of 89% so far in 2012.

CCIA (the Computer & Communications Industry Association) counts Google, Microsoft, Yahoo!, Ebay, and Pandora among its members.

CCIA President/CEO Ed Black said, "Charging different rates for different digital radio providers is fundamentally unfair and goes against the interests of an economy that has time and again chosen to boost competition and innovation." VP Matt Schruers added, "This legislation would update the law to no longer discourage competition since technology has enabled different distribution methods for radio offerings."

Representing larger webcasters, online media, digital services, and technology innovators, DiMA (Digital Media Association) members include Amazon, Apple, Live365, Real/Rhapsody, Slacker, YouTube, and more.

DiMA Executive Director Lee Knife said today, "The 801(b) standard has been widely used for nearly half of a century; and it’s worth pointing out that those who complain about applying the 801(b) standard to Internet Radio today have conspicuously never complained about the application of that very standard by the CRB when setting the rates to be paid for their mechanical licenses."

Broadcast groups like Clear Channel and Salem Broadcasting are also reportedly in support of the bill, and several others are expected to issue statements to that effect. 

The U.S. House of Representatives Subcommittee on Communications and Technology will hold a hearing tomorrow on "The Future of Audio." Witnesses to testify include Pandora founder and Chief Strategy Officer Tim Westergren, along with representatives from the Consumer Electronics Association (CEA), CTIA, RIAA, NAB and others.

The hearing will take place tomorrow at 10:15AM Eastern.

Westergren's testimony will focus on the "severe and fundamental problem" facing Internet radio. "We are subject to an astonishingly disproportionate royalty burden compared to these other formats [AM/FM radio and satellite radio]," his written statement says. "The inequity arises from the fact that Congress has made decisions about radio and copyright law in a piecemeal and isolated manner... It is time for Congress to level the playing field and to approach radio royalties in a technology neutral manner."

Gary Shapiro, President and CEO of the CEA, will offer a similar argument: "No one source should be given preferential treatment over all others. For this reason alone, we do not agree that Congress should take any action favoring broadcast radio over any other source of audio."

Cary Sherman, Chairman and CEO of the RIAA, will also argue that broadcasters pay a performance royalty.

Arguing against platform parity will be Steven W. Newberry, President/CEO of the Commonwelath Broadcasting Corp., speaking on behalf of the NAB. He will argue broadcast radio should continue to be exempt from paying performance royalties because of its impact on local communities and other government regulations it must adhere to, but from which webcasters are exempt.

Jeff Smulyan, Chairman, President, and CEO of Emmis Communications will testify in favor of regulation that puts FM chips in cellphones. CTIA VP Christopher Guttman-McCabe will argue that instead of regulation, FM chips in cellphones "should be driven by consumer preference." He will also request a "light touch" from Congress when it comes to other matters, like spectrum.

Other witnesses to testify include Ben Allison, the Governor of the New York Chapter of the National Academy of Recording Arts and Sciences and David M. Israelite, President/CEO of the National Music Publishers' Association.

You can find more information about the hearing here.

The Consumer Electronics Show (CES) in January 2012 will host a record number of exhibits from automakers, according to the Consumer Electronics Association (CEA). Six of the the top 10 car makers will be present.

CEA CEO Gary Shapiro says the conference will also feature aftermarket in-car innovations like "tablet integration, Internet radio solutions, in-vehicle apps" and more.

Satellite Radio Playground has more coverage here.

Internet radio will be included in 10% of aftermarket car stereo receivers sold by 2013, up from 6% this year. That’s according to the Consumer Eletronics Association.