Tuesday, June 19, 2007

The End Is Near

Day of Silence: June 26th

Potential Last Day for Broadcasting: July 15th

In response to a impending royalty rate increase that, if implemented, would lead to the virtual shutdown of Internet radio in the U.S., thousands of webcasters plan to go silent next Tuesday, June 26, to draw attention to their industry's plight. Wizard Radio's three stations will join this effort and will go silent on the 26th to raise awareness of the impending demise of this special and very unique broadcasting medium.

Here is a brief explanation of the problem:

The Copyright Royalty Board (CRB) was created by Congress to determine royalty rates to be paid to artists, musicians and to record labels by both Satellite Radio and Internet Radio, the new digital mediums. Previously neither artists or record labels had ever been paid royalties by anyone!! In and of itself, this is a huge financial step forward for musicians.

However, under intense lobbying from the Recording Industry, through their association the RIAA, the CRB set the rates at astronomical levels for Internet Radio only. Absolutely no one knows why these rates are so huge.

Let me provide you with some comparisons. Generally royalty rates are typically set to equal 4% to 5% of business revenues. This is the case for other media forms (e.g., satellite radio), and for other copyright holders (e.g., music composers and lyricists). It is also true in other countries.

One would have logically expected the CRB to follow these guidelines. Instead the CRB set rates that are approximately 50% of revenues for the biggest companies like Yahoo! AOL and LAUNCHcast. At these rates even these big companies cannot remain in business.

The CRB decided to absolutely kill the medium size broadcasters, setting rates equal to 150% to 300% of revenues. This includes the really brilliant broadcasters like AccuRadio, Radioio, and Digitally Imported.

But the CRB saved the worst for the most innovative and creative broadcasters, the small operators with large channel choices like Live365 (the net work of over 5,000 broadcasters including WiZARD RADIO), Rhapsody and Pandora Radio. Here the Royalties can be well over 1000% of revenue.

In other words, for ever $100.00 these broadcasters earn, they will be forced to pay $1,000.00 to the RIAA member companies.

Obviously these rates will destroy the only innovators in the broadcasting world.

Certainly Clear Channel and the large corporate owners of AM and FM stations will never offer variety or innovation. Especially once their competition is eliminated.

So on June 26th Internet Radio will go off the air in an effort to raise awareness and force Congress to act. Bills that would save Internet Radio are pending in both the House and Senate. Please call your Senator and Representative and ask them to Save Internet Radio.

For more information please go to Save Internet Radio (http://www.savenetradio.org/).



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