The Importance of Internet Radio to Indie Artists
posted March 13, 2009, 2:53 pm | Log In To Post Comments | 
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Tags: Internet radio, Pandora, RIAA, SoundExchange
The situation is all a little confusing, but it boils down to this: The music industry (RIAA, royalty collection agency, SoundExchange, major labels, etc.) want Internet radio to pay a performance royatly every time a song is played, per listener. So if 100 people hear the same song, that's 100 royalty payments. The fee is in fractions of a penny, but multiply that by webcasters' listener pool and we're talking millions and millions of dollars. For an industry that's just finding its feet. When the biggest player in the business, Pandora, can't even afford such fees, you know there's a problem.
The survival of Internet radio just isn't important for webcasters, it's important for small artists and labels-if not all labels and artists.
How many of your favorite indie picks were found off the FM dial lately? When was the last time that cherished band of yours, seemingly known only to you and your friends, suddenly worked their way up to the Top 40 charts? Hell, MGMT is only now getting onto the charts for an album and track ("Kids") I first heard in late 2007.
Traditional radio is no longer friendly to cutting-edge, independent, or otherwise up-and-coming artists.
The established music industry is no longer interested in finding cutting-edge, independent, or otherwise up-and-coming artists.
Instead, small or indie labels are picking up the slack, and Internet radio is playing the new tunes. Not only is Internet radio one of the only places you can hear some good, underground new music, it also drives music sales. A majority of sites feature easy links, bringing listeners directly to Amazon or other sales sites where albums can be bought in a few clicks or less.
So naturally, the music industry's reaction to such a service is to smother it with unusually high performance royalties. Makes about as much sense as suing your loyal customer base, don't it?
An anonymous music exec recently spoke to TechCrunch, in which he said by 2011 or 2013 record labels may actually be paying Internet radio stations to play their music. The tables will shift completely in less than 5 years. By then, CD sales will be a thing of the past, and the promotion available to all labels and artists online through services like Pandora, Last.fm and my own Future Perfect Radio (here's hoping) will be pure gold.
Until then, we need to make sure the struggling net radio services survive and achieve some decent performance royalty rates. Satellite radio has 'em, broadcast radio doesn't even pay performance royalties! Why is the new kid on the block, Internet radio, slammed so hard? Because there's potential here. Potential to change the game, potential to change the way you listen to music, potential to change the way you view radio.
So try out an Internet radio service, and see what you think. Now's the best time to become a fan, to show your support for a medium that will change the game completely.
That's my two cents at least.
-Michael Schmitt MD/Future Perfect Radio (http://futureperfectradio.com)
