This is Celia Hirschman with On the Beat for KCRW.
For the last month or two, I've been following the Internet-radio royalty beat with interest and so has the American public. In March, the Copyright Royalty Board of three judges determined fees for Internet radio. Sound Exchange, the royalty-collection agency was given the responsibility of collecting the royalties and allowed to charge an administrative fee to the stations. But the royalties plus fees were beyond most large webcasters' ability to pay. Thirty thousand Internet radio stations and thousands more citizens joined in protest. At the Congressional roundtable, Sound Exchange adjusted the rates to meet the market. The public assumed the fight was over.
But as soon as the heat was off, Sound Exchange sent a letter to the Internet radio stations and included a caveat in the offering, a caveat that still destroys Internet webcasting. In the same letter offering a reduction in rates, Sound Exchange demanded that webcasters install "anti-stream ripping technology."
A little background is in order here. Internet radio is delivered over the web but it's not podcasting, which involves downloading files. And it's not an "On Demand" service, which brings specific files to the listener as requested. Internet radio is a streaming medium that presents listeners with a continuous stream of audio, over which they have no control, just like broadcast radio.
The most popular rate for streaming internet music radio is at 128 kilibites per second. In order for stations to comply with Sound Exchanges' new demand, every webcaster would need to reduce each of their music files, which would in turn, create an inferior sound quality. For stations like KCRW, the financial and manpower burden to meet this demand is impossible. Not only are all their music files at 128K, but reducing the sound quality defeats the purpose of presenting quality audio on the radio. Would you want to listen to a lousy sounding Morning Becomes Eclectic? Who would?
Why is Sound Exchange demanding this from Internet radio? Are there so many stream rippers on the web, shorting artists and copyright owners from their rightful piece of the royalty pie?
The answer is a clear no. Sound Exchange's sister organization, the RIAA, says stream ripping is actually not a problem yet. Mitch Glazer, a vice president at the RIAA is quoted as saying recently that though the practice of ripping streams is not a problem, why wait until it is a big problem to address it?
To that, I give plenty good reasons:
1) The audience has always been able to record terrestrial radio. They haven't.
2) Streaming has been around for over a decade and we've never seen a significant ripping problem.
3) Ripping streams degrades the quality of the sound file, so the ripper would be getting an inferior sound file anyway.
4) the objective of internet radio should be to present quality sound, as its done on satellite and broadcast radio.
Why do our leaders in the record business continue to try and contain useful and progressive ideas that only stimulate consumer interest and record sales. Is the industry really that strong that we should impede natural growth, for the sake of a problem that doesn't even exist? I think not.
This is Celia Hirschman with On the Beat for KCRW.