Mending the Tear in the Internet Radio Community: A Call for a Legislative Band-Aid

June 16, 2012

Today, Internet-based radio broadcasters are caught in a royalty rate fight. Internet radio broadcasters are making a name for themselves by introducing America to new forms of music. The number of daily listeners continues to swell. In 1999, the Arbitron Company, a premier media and marketing research firm, estimated that thirty-five percent, or approximately 29 million Americans, had tried streaming audio or video such as Internet radio stations. In early 2003, two Internet-only radio stations finished number one and two on a weekly industry rating of online listenership by receiving more requests for their broadcasts than traditional stations based in London and New York did for their simulcasts. Additionally, the Internet radio listening options continue to grow every day. Listeners can find the widest variety of programming among some of the newest and smallest webcasters. These stations offer news, talk, Motown, UK garage electronica, swing, and Hawaiian music, among other choices. While Internet radio programming, or “webcasting,” may still be in its infancy, it has enormous potential.
This Recent Development posits that Congress should pass legislation setting special hobbyist royalty rates and reforming the CARP system to ensure equal protection for the smallest webcasters’ unique broadcasts, keeping in tune with the growth of Internet radio. The first part of this Recent Development describes Internet radio. The second part contains an overview of the relevant regulatory scheme. In its third part, this Recent Development paints a picture of a divided webcasting community and describes remaining problems related to royalty rates. Finally, this Recent Development suggests legislative intervention to both assist webcasters whose interests have not been represented in the royalty rate disputes and address similar disputes in the future.