Pandora saved?


–Lauren Ruhland, 2008 MCPP intern & Science Editor

Way back in July, Hannah Mead offered up criticism of the system by which internet radio services were charged much higher royalty fees.  This weekend, it appears that the House took a break from thinking about the economy to do something about the fee structure that threatened streaming music sites like Pandora:

Congress is close to passing legislation that would buy extra time to finalize an agreement intended to save the emerging Internet radio market from a crippling hike in copyright royalty rates.

The House on Saturday unanimously passed a bill sponsored by Rep. Jay Inslee, D-Wash., that would greenlight an anticipated agreement between Webcasters and SoundExchange, a nonprofit that collects royalties on behalf of recording copyright owners and artists from Internet radio stations and other digital radio services.

The two sides have been negotiating new royalty rates following the federal Copyright Royalty Board’s ruling in March 2007 that dramatically increased the rates that Internet radio stations must pay artists and record labels. Internet radio stations say the new rates — which most but not all are paying — would effectively put them out of business.

It seems that the proposed legislation extends a deadline for these negotiations and gives the eventual outcome legal backing. Rates for traditional radio airplay (set by the Copyright Royalty Board) are low, because that medium is considered free advertisement for artists and their albums.   Internet radio was considered a different beast because the ability to make preferences in customized “stations” made it more like a product itself as opposed to advertising. (The article says that the National Association of Broadcasters, which represents AM and FM stations, “has withdrawn its own objections to the measure.”  This implies that they had previously lobbied for the distinction.)

Despite my disdain for inefficient bureaucratic institutions like the Copyright Royalty Board, I use streaming internet radio a lot.  It allows me to share my quirky musical preferences with people I think may be interested.

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