Internet Radio "Day of Silence" hushes thousands of stations

Today is June 26, and that means that it's the Internet radio Day of Silence. The Day of Silence was organized by Radio Internet Newsletter publisher Kurt Hanson in order to protest against retroactive royalty rate increases that could end up putting many Internet radio stations out of business. The rates are due to go into effect in less than a month, and with no significant help from Congress as of yet, Internet broadcasters are resorting to silence to demonstrate what will happen if the proposed increases go into effect.

In March, the Copyright Royalty Board said that it planned to change the method by which Internet broadcasters would pay for royalties from a per-song to a per-listener rate. This, combined with new base fees of $500 for each separate station that a broadcaster managed, would require many Internet radio stations to pay crippling fees to the Copyright Royalty Board that would essentially put them out of business.

National Public Radio attempted to get a rehearing with the CRB, arguing that the decision was an "abuse of discretion," but their appeal was denied less than a month later. Still, the CRB offered a small reprieve from the threat of retroactive fees in May by extending the deadline for retroactive rates from May 15 to July 15. A couple of weeks later, SoundExchange tweaked its requirements so that smaller broadcasters won't have to pay increased royalties until 2010—a decision that was unpopular with SaveNetRadio, which argued that SoundExchange's offer would still punish larger webcasters while ensuring that smaller ones would never see any growth.

Hmm, where does Yahoo want me to go?

In response, thousands of Internet radio stations today are broadcasting static, silence, a message explaining the Day of Silence, or are simply not accessible at all. Yahoo! Music agreed to shut down its roughly 200 Internet broadcast stations in honor of the Day of Silence and only offers links to savenetradio.org. Real Rhapsody displays a message on its site when anyone tries to access its channels, urging readers to visit SaveNetRadio as well. Pandora went so far as to take down its entire web site to offer a message about the Day of Silence, and Live365.com shut down some 10,000 of its Internet radio channels today with a message on its web site asking listeners to contact their senators and representatives about the Internet Radio Equality Act.

Smaller-name broadcasters are participating in the Day of Silence too. LoudCity shut down 500 of its own stations today, and one of my personal favorites, .977 Music, is broadcasting silence as well. There are no 80s hits for me today. Noticeably absent from today's protest is popular Internet broadcaster Last.FM, however, despite the fact that the CBS-owned broadcaster will be required to pay the same fees as the others.

"This 'Day of Silence' is an encore of a successful media event that small webcasters organized on May 1, 2002 in response to a similarly royalty rate ruling from a Copyright Arbitration Royalty Panel (CARP) five years ago," wrote Hanson on his web site. "That event garnered national attention and was subsequently followed by a rate cut by the Librarian of Congress and the passage of the Small Webcaster Settlement Act for the period 1998-2005."

He and other broadcasters hope that the outcome of today's Day of Silence will be just as favorable. The Internet Radio Equality Act was introduced to both the Senate and the House earlier this year, which would overturn the CRB's royalty hikes and instead introduce a more palatable rate of 7.5 percent of total revenues. However, neither entity has yet to vote on the legislation, leaving Internet broadcasters anxious as the July 15 deadline looms.

Studies: music industry overstating threat of P2P piracy

Unauthorized sharing of digital music remains a huge issue for the global music business, but is most of that sharing taking place on peer-to-peer networks? For years, peer-to-peer was the bogeyman, the red Communist music monster than was going to devour the industry's revenues. But new research suggests that sneakernets may be as big a problem as darknets.

A recent study from the NPD Group found that legal music downloads surged in 2006, and the company predicts that legal services will have more users than peer-to-peer networks by the end of 2007. But that doesn't mean the music industry isn't threatened. "Unfortunately for the music labels," said Russ Crupnick, vice president and entertainment industry analyst for the NPD Group, "the volume of music files purchased legally is swamped by the sheer volume of files being traded illegally, whether on P2P or burned CDs sourced from borrowed files."

Note the reference to "burned CDs." The EFF points out that NPD thinks this sort of old-fashioned sharing is actually a massive threat. According to NPD, "The 'social' ripping and burning of CDs among friends—which takes place offline and almost entirely out of reach of industry policing effort—accounted for 37 percent of all music consumption, more than file-sharing."

If true, that's a huge number. So why aren't we hearing more about CD swapping from the RIAA? For one thing, lending a CD to a friend is not illegal, and it's all but impossible to keep people from ripping borrowed CDs. Hence, the RIAA's focus has largely been on peer-to-peer sharing instead, with the music industry going so far as to pressure colleges to cut off all peer-to-peer access. This level of attention to peer-to-peer networks makes less sense if CD swapping and ripping is actually a bigger issue.

Regular readers might remember our coverage of Media Rights Technologies, which threatened Apple, Microsoft, Adobe, and Real in early May, claiming that the companies were not using enough DRM. MRT claims that, based on internal studies, streamripping (saving the bitsream from Internet radio or other streaming services) is actually the number one source of infringing copies. I spoke with MRT CEO Hank Risan last week, and he confirmed the claim, saying that streamripping was also one of the reasons behind the recent decision to raise rates on Internet webcasters. (The company has said that it would file lawsuits against Apple, Microsoft, Adobe, and Real within 10 days if they did not license MRT technology; 20 days later, there has been no announcement).

If streamripping truly is a bigger threat than CD-swapping and P2P use, it must account for at least 38 percent of all music consumption, leaving only a maximum of 25 percent for both legal and P2P acquisition of music. If true, it seems downright amazing that the music industry has spent so much time focused on peer-to-peer file-sharing.

Or perhaps it's not all that amazing. A more likely explanation is that the numbers aren't even right. As Canadian law professor Michael Geist showed a few weeks ago, claims about piracy rates can be wildly variable and downright fictional. High numbers are often used to support legal threats or calls for Congressional action, as in the MRT case. MRT has a lot to gain by overstating the threat of streamripping and, so far, has not showed its numbers. Both MRT and NPD agree, though, that P2P is hardly the music industry's biggest problem.

Via: arstechnica.com