Internet Radio Rights and Rules to be Decided in Court
by Alan Sheckter, Smart TV & Sound news editor
Amid uncertainty over copyrights and royalties, which has sent many streaming radio stations into hibernation, record companies and Internet radio broadcasters took to the courts recently, to establish business standards for the fledgling audio service. The hearings are expected to last six months. WebCasters, artists, radio stations and record companies will present their views to a U.S. Copyright-assigned panel of independent arbitrators.
The hearings cover free music services offered by network giants MTV, MSN and AOL Time Warner, as well as traditional broadcast channels, who have all, so far, offered streaming broadcasts, many at 24-hours per day – for free.
This is a situation where the business technology, in this case, music offered through cyberspace, hatched and blossomed before rules were in place to legislate it. By last September, radio ratings authority Arbitron reported 20 percent of Americans had listened to Internet radio.
While Congress did not set specific royalty prices, it ruled, in 1998’s Digital Millenium Copyright Act, that WebCasters were required to pay record companies and artists for the right to play online music. In addition, there has been recent controversy concerning the rights and alledged underpayment of advertising talent, who were paid to do voiceovers for commercials that would broadcast to one city, but now could broadcast worldwide.
The hearings will help define the Internet radio business model. So far, the two sides are far apart. The Digital Media Association, led by AOL Time Warner and MTVi Viacom, offered to pay .15 cents per listener, per hour, to the artists and record labels. The Recording Industry Association of America and artists’ groups say that .4 cents per song streamed, per person listening is deserved. Under the RIAA’s plan, AOL would shoulder an estimated $640,000 monthly expense, while it would be about $21,000 per month, if the DiMA offer went through.