More on Why Canadians Should Care About the US Debate on Internet Royalty Rates
Here’s the truth about setting up any kind of Internet radio station in Canada: the fees that need to be paid are TWENTY TIMES HIGHER than what terrestrial radio stations pay to send out music through their AM and FM transmitters.
Terrestrial radio stations are also allowed to simulcast their over-the-air broadcasts online. But Internet-only services? They’re getting strangled by fees. Why do you think Pandora and Spotify are in countries all over the world but not Canada? Rdio, Slacker, Deezer and any other service that’s available in Canada are sucking it up and paying the fees but they’re in this fight to gain market share, not to make money.
This stifles innovation and annoys music consumers. That’s never a good combination.
Meanwhile, they’re debating this issue in the US. Spotify is hugely popular but is still losing money. Pandora is up against some of fiscal wall. It’s not a level playing field.
Artists are mostly fine with this situation because it brings them much-needed revenues (Read an open letter here.)
Meanwhile, Oregon Senator Ron Wyden has come out in support of what’s called the Internet Radio Fairness Act. From Digital Music News:
For much of the last half century, the music business has essentially been a vertically-integrated industry managed by a few big record companies. These are the companies – these record companies – who in my view are using uncompetitive practices to crowd out the competition on radio and TV and record stores and elsewhere.
They are the people that made ‘payola’ a household word.
The result in my view is less artistic innovation, and fewer innovations that will be widely shared and consumed. Now, if it weren’t for the disruptive independent record labels – I’m talking about people like I.R.S. and Sub Pop and Tim/Kerr – we might never have known much about bands like R.E.M., and Nirvana and the Replacements, who I just told you I don’t want to dedicate a lame duck session of Congress to, but I sure want us to remember their enduring influence on not just rock music, but on their contributions to our culture and an entire generation.
There are a lot of other change agents as well. Sean Parker, who founded Napster, and the creators of YouTube. I gather that you all heard from Tim Westegren earlier today, with Pandora.
So the history of American music is one of artistic creativity, technological advancement, and particularly those innovators – the dreamers – who are willing to disrupt the status quo. And in my view, we’ve got to make sure that’s what the future is all about. That kind of ongoing innovation, and in many instances, what is sure to be disruptive innovation.
If video killed the radio star, let’s hope that digital revives the American music industry.
