Radio AM to FM

Radio AM to FM: July 5, 2002

Royal Pain

Both sides are expressing displeasure in the recent ruling by the Librarian of Congress which slashed fees that internet radio stations must pay for music ... but keeping them so high that most such stations will be forced out of business.

"The import of this decision is that artists and record labels will subsidize the webcasting businesses of multibillion-dollar companies like Yahoo, AOL, RealNetworks and Viacom, said Cary Sherman, president of the Recording Industry Association of America, apparently forgetting that Yahoo and RealNetworks already have agreements with the RIAA and hence are not affected by the ruling at all.

Counters Zack Zalon, general manager of RadioFreeVirgin, "Small webcasters ... will be put out of business."

The ruling set fees for music played on the internet at .07 cent per song per listener. retroactive to October 28, 1998 and due on September 1, 2002. Kind of like back taxes that you never knew you owed. Most estimates peg that amount at an average of $92 per listener per year, or an annual bill of about $60,000 for a popular internet station. That's at least $60,000 more than the average income earned by those stations.

For an interesting cost comparison, note that XM satellite charges about $120 per year for its music service, which features hundreds of different channels. And broadcast stations don't pay these fees at all, unless they want to stream their signal over the internet, as the RIAA recognizes radio airplay as a legitimate promotional tool.

So who is subsidizing whom?

It seems to me that the RIAA should be embracing internet stations, the only viable way of exposing new artists in this age of play-it-safe corporate radio, where even the cutting edge broadcast stations rarely play new music let alone new artists. The internet is one of the few places to hear new music and expose new artists.

Help may be on the way, as many individuals and groups are lobbying congress to change the law that sparked the ruling in the first place, a law that seriously misjudged the future financial status of the internet radio when it was passed in 1998. Stay tuned.

Passing

KRLA (870 AM) sports show host Irv Kaze passed away Saturday night from a massive heart attack suffered shortly after finishing his weekly radio show. He had just sat down to dinner with his wife and mother in a Glendale restaurant when he excused himself from the table, took a few steps and collapsed. He was 75.

On Monday, the KRLA web site included this tribute to Kaze:

"Our friend Irv Kaze passed away Saturday. We will miss him. Irv was named L.A's best radio talk host by the Southern California Sports Broadcasters six times. His show was the longest running sports talk show in the market. Fellow broadcaster Keith Olbermann, who is now with ABC Radio said, 'There was no stadium or arena in this country where there wasn't a crowd of people glad to see him, and another privileged to meet him.' KRLA Operations Manager Larry Marino said, 'Irv was a pro. He knew everyone. Los Angeles radio has lost a unique voice and a good person.'"

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