Phat fees: The day the music died?

WNRN 91.9 is in trouble. Well, not in trouble so much as fairly irritated.

You will be too, if you listen to the station via the internet. Of course, you're equally in trouble if you listen to HipHopBuzz, or KPIG, or Saratoga Dance Jams from your computer's speakers.

And if you don't listen to any of these internet stations, maybe you should think about it. With just a little searching, you could be listening to folk, blues, new release radio, doo-wop, or African drums– something besides the same five artists that the vast majority of radio stations play all day everyday.

On the other hand, don't get too attached. Most of internet radio– including Charlottesville's homegrown 91.9– may come to a crashing halt in October.

That's when internet radio will have to start paying, as well as back-paying, royalties on the songs that they stream out to listeners in cyberspace. For the vast majority of internet radio providers, including WNRN, the fees will be too much.

The short story goes like this. In February, the Copyright Arbitration Royalty Panel (CARP) issued a ruling on how royalty fees for web casting radio should be paid, and in June the Library of Congress also ruled on the rates. For internet radio, these decisions did not go well. Both internet-only stations and commercial radio stations with web-streaming options would pay 0.07 cents per song per listener. This means that for each song with a thousand listeners, webcasters would owe 70¢.

Worse for the stations, the fees are retroactive to 1998, when the Digital Music Copyright Act was signed into law. While traditional broadcasters have agreements worked out between Broadcast Music Inc. (BMI) and the American Society of Composers, Authors, and Publishers (ASCAP) that cost them about 5 percent of their budget a year, internet radio stations will owe more than they take in.

The fees add up to thousands of dollars for the average internet station. For internet-only stations, that's usually thousands more than they earn.

"It's amazing," says Mike Friend, general manager at WNRN. "I don't understand how the Library of Congress got snookered into this with the record companies."

WNRN has been broadcasting on the internet to reach areas unserved by its 350-watt transmitter.

Friend thinks that record companies, frustrated by illegal internet downloads, are now shooting themselves in the foot.

"Here's one outlet that's got reasonable penetration– that's the internet– and the record companies are trying to stop it," he says.

One current bright spot is a bill introduced in July by Representative Rick Boucher (D-VA). The bill would waive the fees small webcasters owe until a new CARP panel can reconsider. Unfortunately, legislators are on recess until September, leaving just a month for something to happen before fees kick in.

There's another light on the horizon. Artemis Records, home to artists such as Steve Earle and the heavy metal band Kittie, announced last week that it would wave internet radio fees for one year. Given that Artemis' artists don't fall into the magic few played constantly on major radio stations, Artemis sees internet radio as a great means of exposure. Friend believes other record companies will eventually follow suit.

"I think they're going to have second thoughts," he says. They're starting to get some real sales from internet radio.

So you may or may not have your internet radio and actual music variety for a little bit longer, depending on who lobbies harder, whether Congress gets its act together in time to put a hold on the enormous royalty fees, and if record companies start to see things differently.

As Friend puts it, "We'll keep streaming until somebody tells us to stop." With a lot of luck, no one will.