Stephen Hill of Hearts of Space runs one of the very few enterprises within the larger public media sphere that makes a substantial part of its revenue from web services. He also produced records for many years. In a new essay on his weblog, he suggests that those of us who see the web as a growth area for content delivery should focus on building viable business models rather than obsessing about the recent Copyright Royalty Board rate decision. He writes:
... My point is that if you have rational business model to start with, paying more — even multiples more — for your basic source material is not a major problem. After that, increased rates are likely to be reflected in higher end user prices. To me this is inevitable and desirable, since it means that significant new income streams will go to the musicians and small labels on whom Hearts of Space largely depends. By "significant" I mean capable of sustaining continued activity by those artists and labels. A SoundExchange check that won't buy a pizza dinner for two is not going to do it. ...
Link: Spatial Relations. Must reading for radio types.
Update 17 Apr. 2007:
Please see the comments below -- Israel's first. --Dennis
The headline above is Stephen's. I agree with his points about the need to fit online content delivery into a rational business model and on broadcast's "carve out" vulnerability, but that doesn't mean that the CRB ruling should just stand as is.
Our station will be able to continue its streams. Our listening is under the floor and that will be the case for most medium and smaller stations (our on air cume in the U.S. is about 90k). So it's not the fee so much as it is the administrative burden, which will be crippling unless some accommodation or automated solution can be found. I'm also very concerned about the impact of this on innovation. This has to be very bad for user/social-defined listening services like Pandora.
Regards, Dennis
Posted by: Dennis Haarsager | Tuesday, 17 April 2007 at 10:57
OK guys, I don't get it. Stations are working hard to cover streaming costs now. This line of thinking "may" make sense for niche producers of content like HOS where a small # of people will pay a premium for for premium content.
What about countless small and medium size broadcasters who will be crushed by this rate hikes? Radio Paradise, one of the most established brands and services on the web has said they may go dark if royalty rates rise as proposed. I fear that this will kill innovation and experimentation with new streams - fewer and fewer people will be able to afford it.
Can even the big stations make it work? KCRWmusic? Xpontential?
May favorite new radio statio is www.counterstream.org. I doubt there are enough listeners to sustain higher royalties to musicians. Since I started listening a month ago, I bought 3 new records by American composers. I never would have heard that music without the station.
Dennis - Will your station be able to continue its streams?
Help a guy understand. Thanks.
Posted by: Israel Smith | Tuesday, 17 April 2007 at 09:11