SAN JOSE, Calif. - The death of Internet radio may be upon us.
On April 16, the Copyright Royalty Board refused to reconsider its March 2 decision that Internet radio operators will have to increase the royalty rates to artists whose music they play on their sites by 300 percent and 1,200 percent.
The decision will go into effect on May 15.
"The very large majority of Internet radio stations will go bankrupt," said John Potter, executive director of the Digital Media Association, in an interview with TechNewsWorld.com.
San Jose State University's broadcast radio station 90.5 FM KSJS also live streams on the station's Web site KSJS.org.
According to KSJS Director of Studio Operations and General Manager Nick Martinez, one of the largest Internet radio stations, based in Chicago, will see their annual running fee go from $55,000 a year to about $550,000 a year.
"The reason why it's so bad is it used to be every song you play counts as a play," Martinez said. "The way they do it now for the Internet, every song that you play is times by the number of listeners you have at the moment.
"So if you have 500 listeners at that time that counts as 500 plays and you basically have to pay for each play and that's where it's going to die."
Martinez says that KSJS won't have to worry about this problem unless their listening audience gets bigger, so the station will continue to stream content on the station's Web site.
According to Potter in a TechNewsWorld.com interview, Internet radio provides exposure and royalties for thousands of independent artists and labels that aren't represented in broadcast radio.
Last year, 72 million people tuned in every month, Potter told TechNewsWorld.com.
The Copyright Royalty Board didn't reconsider the decision stating that, "None of the moving parties have made a sufficient showing of new evidence or clear error or manifest injustice that would warrant a rehearing."
Josh Cartwright, a sophomore majoring in Psychology, said that he's a frequent listener of San Francisco Internet radio station Soma FM. "I think this sucks, personally," Cartwright said. "Some of my favorite bands are only played on Internet radio so if the decision doesn't change I'm not going to be happy."
According to Soma FM's Web site, due to the Copyright Royalty Board's decision, the station will have to raise at least $15,000 a month to meet the current minimum operating budget.
Soma FM is offering a compilation CD titled "Indie Pop Rocks!" to people who donate $35, a Soma FM T-shirt for a $50 donation and both for a $75 donation.
Joseph Duddy, an undeclared freshman, thinks the artists will probably hurt most from this decision.
"From the way it sounds it would seem great for them," Duddy said. "But since the stations that are going to play their songs are going to be gone, they got no way of getting their music out there and it'll cost them."
Martinez, the director of studio operations and general manager for 90.5 FM KSJS, thinks that bands that rely on Internet radio for play won't be affected because they still have outlets such as podcasting and MySpace.
"It does hurt them in one way because radio stations will go under and stop streaming," Martinez said. "But they don't have to pay anything for their music because all they have to do is promote.
"It'll be a little bit harder for them but they should be OK."
Savenetradio.org is a coalition of listeners, artists, labels and webcasters that urge anyone who wants to be heard to act out and voice their opinions to Congress to help save Internet radio.
"I really don't understand why this decision was made," said Joanne Bautista, a junior majoring in Kinesiology. "I don't know why the government would allow any type of media to be forced out."
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