Nowhere on the Net will you find a stickier legal morass than the one surrounding Internet radio.
Bound by an arcane tangle of laws and rulings about copyrights in radio broadcasting, Webcasters are facing the sober reality that before the end of the year, they will be forced to hand over a chunk of revenue to the recording industry in exchange for the rights to broadcast over the Net.
Terrestrial radio stations pay a small fee (as low as 6 cents) for each song they broadcast; the money goes directly to artists via payment clearing houses like Broadcast Music. The new twist is that Internet broadcasters are headed toward having to pay these artist royalties, plus additional royalties earmarked especially for record labelsâ€"-royalties that old-school radio doesn't have to pay (unless a terrestrial station is simulcasting via the Internet). Has the Internet really changed things that much?
Nascent Webcasters have simply been strong-armed by the behemoth record industry, according to Jonathan Potter, executive director of the Digital Media Association, a trade association that represents online and offline broadcasters. Of the years of litigation, Potter says, "Remember in Wild Kingdom, when you'd see a pack of lions attack a pack of gazelles? They go after the weak one. Three years ago, DiMA had seven members, and [the recording industry] simply tried to put us out of business."
The internet won't kill the radio star, the recording industry will kill the internet.