Sunday the day of reckoning for internet radio

Cory Bergman July 12th, 2007

Despite legal appeals and nationwide protests, massive royalty fee increases for internet radio stations will kick in on Sunday. Not only that — the increases will include retroactive pay stretching back to last year. “This is just about the artists getting paid fairly,” said Richard Ades, spokesman for SoundExchange, an association created by the recording industry. “Artists and labels just want a fair share of the pie.” If you ask me, SoundExchange’s greedy corporate motives and old media thinking will only serve to bankrupt hundreds of internet radio stations that can’t generate enough revenue — by nature of the medium — to pay the royalty fees. “Nobody wins when internet radio gets shut down, including artists who ostensibly are being represented by SoundExchange, the organization pushing for high rates,” Tim Westergren said, founder of Pandora. “It’s ironic. If SoundExchange gets their way, it means less money for musicians because people will cease to pay royalties all together.” Exactly.

Update: There’s last-minute negotiating and perhaps a reprieve of sorts.