Internet Radio Growing Despite Hurdles
From the Toronto Star: “Judging by the hoops and hurdles the fledgling Internet radio industry is currently hopping through in the United States, the medium that arguably holds the most promise since the introduction of the FM band appears to be at a crossroads. Copyright battles, reporting requirements, royalty fees to artists and much more have turned the volume down dramatically on what was touted as one of the most promising directions the broadcast industry has gone in — ever.
“Despite its initial promise, Internet radio is falling victim to rules and regulations largely meant to put an end to the illegal practice of file-swapping, where people download music and other content and share it without paying for it… 
“The rules forced the closure of hundreds of small Internet radio stations… (and) prompted numerous terrestrial radio stations to shut off simultaneous Web broadcasts that they provide more as a marketing courtesy than as a money-making service. Yet at the same time demand for Internet radio has been climbing as streaming quality has improved, as users embrace it and many people abandon the idea of downloading 10,000 songs and take solace in someone else other than them playing DJ…
“Indeed, not only is the nascent business butting heads with many different intermediaries in the biz, it is also struggling with regulators who not only want to ensure the industry gets its cut but also want to make amends for some of its past mistakes — namely not collecting enough in royalty payments from conventional radio operators to compensate artists.
“In Canada it’s a bit of a different tune. While the issues remain the same, Internet radio broadcasters such IcebergRadio.com and others are working with both industry groups and the record labels to ensure everyone gets their fair cut without killing off the product…
“To be sure, there are good reasons behind the advent of the three Rs — rules, regulations and royalties… Even so, they may ultimately accomplish more than they bargained for — reducing the number of Internet radio outlets to only a handful owned by companies big enough to afford to dot all the `I’s, cross all the `T’s and also cough up the royalty payments…
“Regardless, most agree Internet radio will survive and eventually thrive. With cellphones, PDAs and yet-to-be-unveiled gadgets increasingly pre-wired for high-speed Internet access, music and talk piped through the Web to portable and stand-still devices will be a natural.
“The question is in what form. For the moment there aren’t too many advertisers willing to buy time on a medium whose still-tiny audience is global rather than local. And with more rules still to be negotiated in the U.S., in this country and in many others with all those who have a finger in the industry, many might not be able to afford to pipe tunes over the Web…
“Still, these types of industry growing pains have played themselves out before. In the 1920s the music industry said broadcast would destroy it, just like the movie industry said television and then the VCR would kill it off. So far both are alive and thriving, suggesting Internet radio, too, might have a future.”
