Webcaster Settlement Act passes House, poised to pass Senate

But what does this mean for the future of online radio?


Cyrus Farivar
September 30, 2008 6:55PM (UTC)

Now that I live abroad, I rely on Internet radio that much more -- I can easily tune in to National Public Radio Web streams from back home, and can enjoy the usual tunes spinning on SOMA FM. As such, I was stoked to see that a bill is set to be passed in Congress that both my favorite Internet radio stations and the copyright holders can be pleased with.

In a Saturday session last weekend, the House unanimously passed a bill that allows for the two sides to continue to negotiate the final agreement on how much royalties should be, given the Copyright Royalty Board's ruling last year that caused a significant rise in the rates that online radio stations must pay for the right to broadcast. The collective group of "webcasters," which includes NPR and others, have said that these new rates would effectively put them out of business. The new rates charge webcasters per song per user, and will more than double by 2009, going from $0.0008 per song per user in 2006 to $0.0018 by 2009.

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The collective webcasters were asking for a new negotiation in Congress, while the National Association of Broadcasters opposed such a move initially, as it feared the webcasters basically would get a better deal than the NAB would. However, after some eleventh-hour negotiations, and intense lobbying by NPR and Pandora, the NAB relented, and the negotiation deadline has been extended beyond the initial deadline of Dec. 15.

So what does this new bill mean? Effectively it means that negotiations between webcasters and SoundExchange (the RIAA entity responsible for collecting royalties from digital transmissions of music) will now be extended to the new deadline of Feb. 15. In other words, online radio should keep going.

Given that even old-school broadcasters like NPR are getting into the online audio game -- the Associated Press reports that downloads of NPR's podcasts have tripled in the past two years -- new channels of distribution are key to preserving the great content that's on the airwaves or, nowadays, the series of tubes.

The real question, though, for nonprofit broadcasters like your local public radio station and SOMA FM that rely on listener donations is whether this new audience will come through with money to support the stations. In an oft-circulated blog post last year, Wired magazine editor Chris Anderson argued that even though he's a longtime listener of public radio, given that he pretty much listens to programs only via podcast, he's no longer wedded to his local station but, rather, the particular program that he chooses to receive via podcast. As more and more listeners follow his lead by donating to, say, "This American Life"'s home station (WBEZ Chicago) directly, instead of to their home public radio station, the entire traditional model of American public radio could break down.

As a consumer of public radio who spends more time listening to programming via my iPhone than over the airwaves, this can only be a good thing.

Then again, as one commenter pointed out:

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As for your donation to the show versus the station, I believe the money goes to the same place: the larger system that makes great shows like "This American Life" possible. We should be careful as a nation to be loyal to systems such as democracy and public health, not just to our personal favorites. The concepts underlying public radio would be worth supporting, even if we disliked all the shows.

Cyrus Farivar

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