What do you think the Save Internet Radio campaign can accomplish? Do you think that it can do anything, or is it already too late?

We realize that going after CARP is the wrong thing. That's like going after the punishment, when really what you have to do is go after the original law that put this in place. The DMCA dates from back in the late '90s, when the mind-set was, "Oh, it's digital, it means a perfect copy of something."

Congress didn't really think about how streaming audio broadcasts are using compressed audio and that they do not sound as good as the original CD. Streaming is not a way of actually distributing recorded music. And that's what the RIAA and the other copyright owners were concerned about when they were pushing for the passage of the DMCA. They were all scared that people would be able to distribute perfect copies of their sound recordings.

The key phrase there is "perfect copies." [The DMCA] talks about how digital allows "perfect copies" of an original. And therefore they had to be taxed or there had to be a royalty at a very high price, because these perfect copies would be taking away from record company sales.

But the truth is that with Internet radio, while the sound quality is good, in most cases, it's not as good as the FM broadcast. And in some cases when it is as good as an FM broadcast, we all know that an FM radio doesn't sound nearly as good as listening to the original CD.

So, there's a big letter-writing campaign going to amend the DMCA to separate systems that would distribute perfect digital copies vs. systems that distribute degraded digital copies. When you compress it using Windows Media or Real Audio, the copy you are distributing is no longer a perfect digital copy, it's a degraded copy. It's not the same as the original. We want to change the DMCA to reflect that Internet broadcasting is not distributing these perfect digital copies. We want to see the DMCA amended to state that Internet broadcasting, which is different than peer-to-peer file sharing or online musical distribution services, should be treated the same way as over-the-air broadcasts.

So, the fees that you're talking about from this CARP ruling, you would be paying them in addition to the ASCAP and BMI fees that you're already paying?

Yes. The fees are for distributing the recording of the song. Copyright law is kind of weird and confusing. There are a couple of pieces -- there is the recording, there is the song itself, which is generally considered the composition. The artist almost always owns the composition, but in most cases the record labels own the recording of that song.

So, you guys see this money as going to the record companies, not to the artists?

Yes. The ASCAP and BMI fees go to the artists, but the fees that CARP deals with go to the record companies.

What kind of fee do you think would be fair?

I think that it would be comparable to the BMI and ASCAP fees.

Do you think that these new fees will force indie Net radio stations to go more commercial with subscriptions or advertising or go underground, or do you just think they will shut down?

We think that some will go much more commercial, but then you play only the music the record companies want you to play. The record companies want to push a very limited number of records. They get like 90 percent of their revenue from probably less than 10 percent of the music that's out there. So, they would want to see Webcasters pushing the stuff that they want to push, and not all this other stuff, because they don't think that they're going to make as much money on the small independent artists.

The other direction that the independent stations could go is to start playing music by truly independent artists who are not affiliated with record labels, and that's what a lot of them have said that they'll start doing.

The only problem with that is that overall the quality of music goes down, and you're going to lose a lot of the audience. A real successful independent station will play a lot of obscure upcoming artists or unreleased artists on minor labels, but also mix in some stuff from some of the bigger labels.

I understand that you're making a big effort to separate this case from the Napster debate. What impact has the Napster case had on Internet radio?

The problem with Napster is that people think that Internet radio is just another way to get music for free. And, you know, in some ways it is. Some people who listen to the radio never, ever buy music, but I probably get like 20 e-mails a day from people trying to track down records that are hard to find.

And I've gotten other e-mails from people who say, "Oh my God! Since I've listened to your station, I've bought like 60 records. It's all this new stuff that I never knew existed before. Thank you for introducing me to it." It's not like people are coming to us to get music so they don't have to buy CDs. The core of our audience is people who are looking to discover new music.

Do you think that the whole Napster debate has made it more difficult to argue for the legitimacy of Internet radio?

Yeah, because Napster has sort of equated Internet music with stealing music. We just want to be treated as over-the-air broadcasters are treated.

Recent Stories