Conspiracy Against Internet Streamers

There is something seriously wrong when Pandora – arguably one of the most popular Internet streams out there – is close to pulling the plug and shutting down.

A million daily listeners and record numbers of iPhone users (and me) are going to be very unhappy.

The reason?

SoundExchange, a company that works for the record labels and artists, won a copyright decision that implements a burdensome (if not unworkable) financial formula on Internet streamers to pay copyright fees. Webcasters are trying to get relief but SoundExchange just drags its feet.

No one really cares.

Satellite radio pays a much smaller fee – go figure.

Radio pays nothing other than the customary ASCAP, BMI, etc licensing charges.

And few are coming to the defense of Internet streamers – thousands of whom went silent June 26, 2007 when the higher royalty fees kicked in.

The NAB has been worthless on this issue. After all, they think Internet streamers are not their constituents. They represent terrestrial radio and I guess they think that it’s not in the interest of the radio industry to fight for their Internet brethren.

Foolish. The NAB should represent streamers because if they're going to go out of business with the radio industry that just turned in its 17th consecutive monthly revenue decline.

Radio has no future beyond the listeners who already like radio and keep listening. Only a small percentage of hard core radio listeners listen online. Radio companies are asleep at the wheel when it comes to anything to do with the next generation – and this includes, as George Bush would call it, the Internets.

Pandora founder Tim Westergren is quoted in The Washington Post as saying that 70% -- that’s a whopping three-quarters – of its paltry $25 million in revenue will go toward paying royalty fees.

If radio had those ratios, they'd be screaming bloody murder.

No wonder Pandora is not long for the world. Pandora is in Westergren’s blood. Talk about genomes – it’s in his DNA. The last thing he would want to do is shutter the operation.

It’s unthinkable – how could you close down one of the most popular streams with the next generation and let satellite radio – a loser with Gen Y – continue under a sweetheart deal?

It’s a conspiracy – alright, I’m being dramatic, but maybe not too dramatic.

It isn’t in the best interest of radio to allow Pandora to compete with them. They have enough problems. You get the point I'm sure.

It isn’t in the best interest of satellite operators – I mean operator – to fight for more competition online. How stupid could I be?

It isn’t in the best interests of the record labels to have another channel on which their music can be heard by Gen Y – the generation that gave up on terrestrial radio. After all, the record labels don’t think about strategy. They’re manufacturers of plastics discs that they used to sell a lot of and now since sales are falling -- screw everyone else.

Well, everyone is wrong.

Sorry to be so heavy handed about it but it is true.

I write every day about generational media. There is no future for traditional media beyond Gen X. The next generation is off and running elsewhere.

Radio has no future unless their many talented people can be reassigned and funded to create new content for the Internet and mobile devices.

In other words, these geniuses in the radio business are really screwing themselves when they oppose more equitable royalty rates for Internet streams. I know. I know. Big companies can afford big royalty fees and radio groups are big.

Not so fast.

Radio groups can barely break even in commercial radio let alone justify the Internet royalties they must pay.

How shortsighted.

So, have a good time everyone!

When radio is dead and satellite radio is still trying to be the next “radio” (a little late) and record labels wind up with nothing to sell, Internet radio will still be the future.

The public wants it – no, demands it.

Thousands of entrepreneurs including very talented and very fired radio executives and personalities could be tomorrow’s hot “radio” people.

Write it down. You read it right here.

Before the cock crows twice, all their brethren will turn on them – but Internet entrepreneurs will rise from the dead and resurrect a dying media business by doing one thing.

Playing music that isn’t licensed.

Go. Do it.

Licensed music isn’t exactly lighting up radio's hit lines.

There’s a whole new world of undiscovered artists out there and djs like Michael Tierson and friends (among others) who can engage a new generation in the music of the Internet made of necessity.

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