In essence, the new rates will effectively push many small webcasters off the Internet because the cost of streaming most popular music will become prohibitive.
The only entities which will be able to absorb such costs will be either those few independent Internet radio stations which do make a profit or the larger broadcast and streaming concerns like Clear Channel, AOL Radio Network, MSN Radio, and a few others.
As for the hobbyist webcasters, wannabe DJs, non-profit operations, and others who have reached out to grab the streaming ring for that prize of worldwide attention, they may soon have to let go of it.
Follow the Money
There is no doubt that the forces behind this decision have lobbied for this particular outcome because in the end, the big boys want less out there competing for your attention. Content - either broadcast to traditional radios or HD radios, streamed over the Internet or to cell phones, wired or wireless, is the future.
Any large concern which has content to offer, wants to put it in front of you and whoever else is willing to listen or watch. Content means big dollars and one of the best ways to make more of that money is to limit competition - which is what is happening here.
If the new, proposed rates go unchallenged and become the standard, smaller webcasters have a choice: evolve or die.
The hobbyists doing it for a lark will be gone fast. But, those webcasters who really want a voice on the Internet need to use this opportunity to grow what they do.
What Webcasters Can Do
The answer is simple: find content that is not tied to any royalty structure.
Any webcaster can survive who originates his/her own content like talk shows, instruction, news, original music, etc. If the only thing you can do is stream someone else’s music, then quite honestly you haven’t been offering anything that can’t be obtained somewhere else.
We don’t need another 70s station. What the world does need is compelling content that is useful, meaningful, entertaining, or at least unique.
The new proposed royalty structure is going to prove to be a huge shakeout. The webcasters who survive will do so because they not only love the idea of controlling their own Internet radio station but have the insight to realize that content is king - and they can be king of their own content, too.
