Representatives from a cross-section of the audio entertainment industry, including AM/FM radio, internet radio and manufacturing interests, have banded together to form the IRFC, in support of The Internet Radio Fairness Act of 2012.
IRFC says that the legislation, introduced by Jason Chaffetz (R-UT), Jared Polis (D-CO), Darrell Issa (R-CA), and Zoe Lofgren (D-CA) in the House and Sen. Ron Wyden (D-OR) in the Senate, is “…aimed at bringing the royalty system for Internet radio into the 21st century — creating a sustainable business model for the industry that gives consumers more choices and more products for listening to the music they love; enables artists to earn more money as Internet radio grows; creates a marketplace that will attract entrepreneurs to invest in new, innovative ways to deliver music to the public; and drives higher revenues for record labels.”
IRFC’s initial membership list includes: 977 Music, AccuRadio, Clear Channel Media and Entertainment, Computer and Communications Industry Association (CCIA), Consumer Electronics Association (CEA), Digital Media Association (DiMA), Digitally Imported, Engine Advocacy, National Religious Broadcasters Music License Committee (NRBMLC), Pandora (NYSE: P), Radio Paradise, Salem Communications, and the Small Webcaster Alliance (SWA). The Coalition website is www.InternetRadioFairness.com.
The coalition finds fault with the decision of the Copyright Royalty Board’s scheme that creates an unfair disparity between the rates paid by satellite and internet radio outlets.
Clear Channel’s Bob Pittman weighed in, saying, “We believe that market-based solutions are the way to go.But in the absence of these agreements, the CRB needs to have and consider more relevant information so they are better able to develop a rate structure that will lead to a healthy, sustainable Internet radio marketplace. This will enable artists to earn more and connect more with their fans, consumers to have more choices, and entrepreneurs to invent and invest in new services.”
Pandora’s Tim Westergren added, “Legislation that establishes a fair royalty rate setting-standard for Internet radio will drive investment in webcasting, which ultimately offers greater opportunities and more revenue for working artists. Internet radio has been shown to help decrease music piracy and increase music sales. When the digital music sector is allowed to grow and innovate, everybody wins.”
RBR-TVBR observation: The question for musicians is this: Do you gamble that a healthy and vibrant internet audio platform will provide multiple opportunities for consumers to discover your music, making up for smaller per-click income with greater volume? Or do you keep the price at a point where the internet platform withers and income is limited.
Keep in mind that the possibility that greater distribution at a smaller price point could be an equal or superior model in terms of income.
And on top of that, a vibrant online distribution platform will provide all the marketing and promotion side benefits at no extra charge – just as with AM/FM radio, it’s free advertising. The easier it is for the public to find a musician’s music, the more recordings, concert tickets and ancillary products the musician will sell.