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Web Radio Takes Moment of Silence

On Tuesday a number of popular Internet radio sites, including Pandora, Yahoo Music and Live365, went dead in protest of a new restriction proposed by the government and music labels, reports CNN Money.

One conspicuous hold-out in the Tuesday protest was, which is now owned by CBS.
The Digital Millennium Copyright Act was discussed in March at a panel intended to determine how much webcasters must pay record industries for playing artists' oeuvres.

Fees went up approximately 30 percent this year and next. Webcasters were also asked, without explanation, to pay a minimum $500 "administrative fee" for every channel they broadcast online.

Unlike traditional networks, "channels" are fluid and, in the online radio world, used for user customization purposes, meaning listeners can create myriad new ones on the fly, based on their unique preferences.

Such is the case with a site like Pandora, upon which a user can create a new channel based on a favorite song or artist. And last year Rhapsody, a site run by RealNetworks, streamed over 400,000 channels.

With this in mind, the additional channel fee would eclipse the revenue most online radio sites make. Yahoo, Pandora and RealNetworks would have to spend $1.15 billion per year on the administrative fee alone.

"To demand more than 100% of profits [for Internet radio operations] is insanity," says Tim Quirk, RealNetworks' VP of programming. "It's worse than our worst-case scenario."

Webcasters have filed for an emergency stay with the US Court of Appeals. A bipartisan bill with 120 sponsors is also working its way through Congress.

Should the bill pass, Internet radio fees will fall in line with those of satellite radio, which pay the music industry 7 percent of their total revenue.


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