Under the terms of the Digital Millennium Copyright Act (DMCA), the Librarian of Congress is required to set "sound recordings performance royalty" rates for Internet radio stations by May 21st -- and a Copyright Royalty Arbitration Panel (CARP) working for that office has recommended a rate of $.0014 per listener per song (or $.0007 for broadcast simulcasts). Many webcasters say the proposed royalty rate is the equivalent of 200% or more of their revenues.
By crying 'Mayday! Mayday!' on Wednesday, webcasters are hoping that listeners will take the time to contact their representatives in Washington and ask those representatives to express their concerns to the Librarian of Congress, delivering the message that "the legislative intent of a statutory royalty rate was supposed to be to encourage the growth and diversity of the industry, not to kill it."
"The proposed fees would definitely put us out of business," said Bill Goldsmith, the owner of popular Paradise, California based adult rock station RadioParadise. "If that happens, everyone loses: our listeners, the artists we play, and the record labels themselves. We'd see two years of hard work and sacrifice go right down the drain."
The RIAA (Recording Industry Association of America), which lobbied Congress for royalty payments in the first place, has denied that the CARP's recommended royalty rate will cause significant harm to the Internet radio industry, arguing that the industry is "crying wolf." But Beethoven.com's Kevin Shively disagrees.
"Here's an example of how the CARP-recommended rate would affect webcasters,” he offered. “For eight of the larger independent webcasters -- Beethoven, Digitally Imported, Radioio, Radio Paradise, SomaFM, 3WK, Wolf FM, and Ultimate-80s -- we calculated that our total hours streamed last year were 40 million hours and our combined revenues were $93,000. But according to the CARP panel's recommended royalty rate, we'd owe a royalty to the RIAA for the same period of $710,000!"
Goldsmith added, "If you do the math, you'll see that not one webcaster -- large or small -- can cover these fees with their present levels of income."
On Monday, a letter signed by 20 key members of the US House of Representatives was sent to the Librarian of Congress, expressing concern that the CARP proposal for webcasters is "both contrary to the intent of the DMCA and Congress's general policy not to stifle innovation on the Internet."
Both the Los Angeles Times and the San Jose Mercury News have issued stinging editorials rejecting the proposal and urging the Register of Copyrights to adopt a more reasonable approach, with the Mercury News suggesting that if the Copyright Office doesn't lower the rate, Congress should eliminate the royalty entirely.
On May 1st, webcast listeners will be encouraged to call or write their state's two Senators and their district's Congressman, asking them to add their voice to the effort to set a royalty rate that will not destroy this nascent industry. Banner ads and PSAs will be available to all participating stations, and SaveInternetRadio.org will be redesigned to specifically focus on the day's event.
"Whether their trade association, the RIAA, realizes is or not, killing Internet radio is NOT in the best interests of record companies," argues Kurt Hanson, publisher of "RAIN: Radio And Internet Newsletter" and one of the organizers of the "Day of Silence" event. "Internet radio is giving great exposure to dozens of genres and thousands of artists who currently don't get airplay on AM and FM radio stations."
Most webcasters are planning the May 1st "Day of Silence" to begin at dawn in their time zone and end in late evening. Some webcasters plan to go entirely silent, while others plan to replace their music streams with periods of silence interspersed with public service announcements on the subject. (Some webcasters plan to broadcast, on at least one of their channels, an all-day talk show on the issues involved produced by WOLF FM's Steve Wolf.)
Webcasters that will be participating in the "Day of Silence" include the majority of the top-rated independent webcasters, including AllDanzRadio (various formats), Choice Radio (various formats), ChronixRadio (rock), ClevelandHits.com (CHR), CyberRadio2000 (various formats), Digitally Imported (various forms of electronica), HardRadio (rock), iNetProgramming (bluegrass and other formats), Internet Radio Hawai'i (Hawaiian music), KING-FM/Seattle (classical), KPIG/Freedom, CA (Americana), M4Radio (indie rock), Mostly Classical (classical), Radio Paradise (AAA), Radioio (AAA) and RAIN Radio (several formats).
Other webcasters planning to participate include SomaFM (electronica), 3WK (alternative), TwangTownUSA (country), Twangcast (country), Ultimate-80s (Eighties), Village Voice Radio (eclectic), WCSB/Cleveland (various), WICB-FM (Ithica College), and WOLF FM (70s-80s-90s).
Webcasters who may not go silent but who plan to support the effort with heavy schedules of PSAs (that will include a moment of silence -- e.g., "Here's what Internet radio may sound like on May 22nd...") include Beethoven.com (classical), Live365.com (various formats), ClassicalMusicDetroit (classical), Radio Free Virgin (various formats), Shoutcast (various formats), Winamp Radio (various formats), and several other college and noncommercial webcasters.
Some major terrestrial broadcasters (many of which stream simulcasts of their broadcast stations on the Internet) also plan to support the effort with either silenced streams or a combination of banner ads, public service announcements, information on their websites, including major broadcast groups Susquehanna Radio Corp. and Cox Radio.
Additional webcasters who have committed to be part of the "Day of Silence" include Audiocandy.com (legal downloads), BumpNgrind Radio, Daily Dementia Overdose (punk/hardcore), Destination Doo-Wop (doo-wop), TheDownbeat (downtempo), Flaresound (deep house), Green Mist Radio (Celtic/folk), HitzRadio (CHR), KCRW/Santa Monica (NPR), KOZT/Mendocino County (adult rock), KUSA Radio ("spanning a century of American music"), KTRU/Rice University, RadioMaxMusic (various formats),. Rave Network (electronica), Red White & Blue Radio (Americana & country), Reign Radio (Christian hard rock), SmoothJazz.com (jazz), The70sStation ('70s), Stanford University streaming media, WebRadioPugetSound (various formats), WETD/Alfred State College, WFMU/Jersey City, NJ (the longest-running freeform radio station in the US), WMVY-FM/Martha's Vineyard (progressive), WSIA-FM/Staten Island (CUNY), World Music Webcast (world music), and Zoetek World Radio (world music).