Saving Internet Radio (PC Magazine)
Tim Bajarin - eSeminars Thu Oct 2, 7:50 PM ET
When I was a kid growing up in San Jose, my trusty transistor radio was my first real companion. Baseball games were rarely televised back then, so if you wanted to follow your local team (for me it was the Giants during the heyday of Willie Mays, Willie McCovey, and Orlando Cepeda), the only way was the radio. Many times during class I would sneak a listen to get the score of a game. And on lazy summer days, I would lie back against a tree trunk in my backyard, close my eyes, and picture the action as I listened to my little transistor. It had an old leather cover, and to this day I can remember how it smelled and felt in my hand as I carried it from place to place.
Once I became a teenager, that transistor radio became my music player. While my dad drove our '57 Impala, I would sit in the backseat with my single-earearphone singing along to the Beach Boys—my dad had the car's radio tuned to the local news. The day President Kennedy was shot, I remember being let out of school before lunch. On the way home, for the first time, I listened to the news and reports of the assassination.
Radio was my escape from the day's local humdrum, and in many ways it allowed me to peer into brand-new and unimagined worlds. However, as I grew older and television became the center of my media world, radio became less important. Sure, it was always on in the car, but it was more a time filler than a sports and music environment. And although listening to the radio had been a part of my life for decades, at least when driving a car, it grew less and less important to me amid the overwhelming choices I now have to get sports, music, and entertainment news.
But two technologies have restored my lost love of the radio. The first is satellite radio. I was an early adopter of XM and Sirius, and today they deliver most of the news, sports, and music I listen to while driving. I especially like the comedy channels, NPR, and ESPN, but the various music and talk shows have also become a haven for me. I even take handheld players with me when I walk the dog in the morning. I still listen to local news and sports over traditional broadcast radio, but satellite radio has really become my commuting partner of choice.
Still, the technology that has really become my worldwide travel companion is Internet radio. I'm partial to Pandora, which lets you create your own personalized channels with artists you like; I also like Slacker, with its broad range of stations covering all genres—it's almost always on in the background in my office. Internet radio is at its best when I'm on the road, especially out of the country. Pandora makes it possible to feel as if I'm at home while I'm thousands of miles away. Since I am a satellite radio subscriber, I can stream most stations even from Beijing or Paris. And since my favorite local sports and news stations are also online, I often tune in to them to as well. While I'm getting ready for a meeting in Tokyo (or wherever), I'm listening to my local radio stations as if I were at home. And for that moment, it brings me the comfort of the familiar.—Next: Webcaster Settlement Act of 2008 >
But until this week, the fate of Internet radio was uncertain. An important bill sat before Congress: Called the Webcaster Settlement Act of 2008, it guarantees that if Internet radio stations and copyright holders can reach a deal over royalty rates, the government will not interfere.
I spoke via e-mail with Pandora founder Tim Westergren, who told me that Internet radio stations such as Pandora had been contesting a Copyright Royalty Board (CRB) decision from March 2007 that dramatically increased the royalties Internet radio stations were forced to pay. He pointed out that Pandora would, under the CRB rules, have to hand over $18 million of its expected $25 million 2008 revenue to cover royalty fees—a price that could force the company out of business.
To Tim's credit, he helped orchestrate a major e-mail and call-in campaign asking congressional representatives and senators to pass the Webcaster Settlement Act. Over the weekend, the House finally agreed and passed it. And on Tuesday, the Senate did too. This gives Pandora and other Internet radio stations time to cut better royalty deals so that artists can still make money and Internet radio can stay alive.
Beyond Westergren's campaign, others helped make this happen. NPR has many friends on the Hill, and the organization lobbied hard to get the bill passed. However, the National Association of Broadcasters (NAB) lobbied against it, saying that Web competitors could get a deal done instead with SoundExchange, the body that collects the royalties. The NAB objected to the fact that they had only until December 15 to complete their deal. The major U.S. representative behind this bill, Howard Berman (D–CA), agreed to extend the deadline to February 15, the same date allotted for Internet radio groups to work out their deals with SoundExchange. With that provision, the NAB dropped its challenge.
Now Pandora and the rest of the Internet radio companies can start negotiating. I'm hopeful for a win-win deal, whereby artists and Internet radio companies make it possible for the public to have access to great Internet radio for a long time. After all, it was thanks to satellite and Internet radio that I rediscovered a long-lost friend.