Ohio's Internet stations prepare for silence

[Dr. Whiplash]

By Tim Feran and Carin Yavorcik, The Columbus Dispatch

Come Sunday, thousands of Internet radio stations are expected to fall silent. Federal regulations to take effect that day will dramatically boost their royalty fees, which many won't be able to pay. Station managers -- often simply passionate fans working from their homes -- are struggling to get around the increase and keep going. Most, however, acknowledge this week as probably their last.

"I'm stressing out," said Vince Riley, whose Star1079.com celebrates '80s oldies. "It would cost me a minimum of $500 a year plus additional royalties plus streaming fees." Some features will still be found on his Web site past Sunday, but his music stream -- along with about 10,000 others -- will lose its home at Live365.com, the largest host of Internet radio stations. The outlet plans to close when the regulations go into effect.

"We will be obligated to write a check for over $6 million we just don't have," spokesman Rod Hsiao said.

The Copyright Royalty Board, a congressional panel, decided March 1 to raise the royalties paid by Internet radio to compensate the creators whose music is played.

"It's necessary that artists get paid the proper value of their work," said Richard Ades of SoundExchange, the nonprofit group that collects royalties on behalf of acts and record labels for digitally played music. Fees will gradually rise from 0.000762 cents per song per listener to 0.0019 cents in 2010. Such figures, though seemingly minuscule, add up for small stations, especially when coupled with a $500 minimum annual fee.

A station with a 500-listener average will be charged $211 a day, Riley says on his site in a message to listeners.

"When you take into account the fact that it takes average listener counts in the thousands before you can really expect to see any real degree of advertising revenue, it becomes very difficult just to keep the bills paid," said Jimmy Blake, co-owner of Second Shifters -- an online gothic-rock station based in Sandusky.

Blake, Riley and others with stations at stake are still hoping for a last-minute reprieve: A group of webcasters has sought an emergency stay with an eye toward legislation nullifying the Copyright Royalty Board decision.

Some station operators in Ohio intend to explore other options. Pat Leonard, who runs the indie-rock station Pat Radio from his Upper Arlington home, hopes to get blanket permission from labels or artists to play their music. Meanwhile, he'll have to discontinue his stream -- although he doesn't exactly draw a huge audience: On a good day, he might get five listeners at once.

"My revenue is pretty much zero," he said.

On the other end of the dial is Matt Getridge, whose Hussieskunk Punk Rock Radio attracts about 20,000 listeners a month. Getridge, who operates the station from a spare bedroom in his Westerville home, doesn't expect much to change for him. Most of the music he plays is derived from compact discs sent to him by acts or labels -- which he interprets as permission to share them online. Still, the new rules might require him to take more initiative.

"I'm hoping to avoid having to have someone sign away any royalties -- I do believe that they deserve to be paid for their music -- but maybe the time has come for me to track them down and do that," he said. "As much as this style of music abhors that kind of behavior, I think it's something we're being forced to do."

Blake, of Second Shifters, also plans to keep on playing. With his wife, he will try to absorb a higher monthly fee from the host site SWCast.net -- which in turn takes care of royalties. Second Shifters is charged $60 a month; the couple doesn't know yet how much the fee might rise or whether SWCast will operate beyond Sunday. Should the host site be shut down, Blake will play music only by the bands that have given him written permission.

"While this will greatly limit our playlist and our listener counts, . . . it could lead to a strong movement by artists to break with RIAA (Recording Industry Association of America) labels so that they will have the opportunity for their songs to be heard by a steadily increasing audience of Internet radio listeners."

Ades, with SoundExchange, acknowledged the unlikelihood of obtaining permission from individual acts. "Any artist is free to make a direct licensing deal," he said, "but it becomes a nightmare with paperwork."

Other webcasters, not wanting to fight the new royalties, have already stopped the music.

"We pulled the plug on April 30, and I miss it," said Jake Sommers, an afternoon host at WCVO (104.9 FM) who helped run a site devoted to jazz trumpet music. "We get letters from all over the world. It was the only place in the world you could get that kind of music."