"There is no industry"

If you've been wondering why it's been silent around here this week, here's why.

N. Mark Lam, the CEO of Live365 Inc., a privately held company that aggregates audio streams from thousands of radio stations and other small webcasters, said that under the new royalty rules, "there is no industry."

Even if Live365 survives, I'm still trying to figure out if Musical Justice is going to be able the stay on the air. Even if the answer is yes, it's very likely that I'm going to need to severely restrict the number of listeners, which kinda defeats the purpose of a radio station that's trying to spread the good word on all the great music that's out there...

Here's Information Week's take...

The Copyright Royalty Board has quickly and completely affirmed its own decision on performance royalties, set in accordance with recording-industry wishes, that will be assessed against Internet music-streaming and radio-station sites. Because the rates, which were more than a year overdue, were much higher than the Internet radio industry expected, and retroactive for 2006, one possible result is that many small Internet radio operators will cease operations immediately and wait to see if Congress or the courts will provide relief.

The board in March adopted the recommendations of the recording industry, and the action created a storm of protest from broadcasters and the many small businesses that had been created to serve niche markets via the Web. The rate-setting decision more than doubled the rates for 2006, and mandates further major increases in 2007 and 2008.

The board invited requests for a rehearing, and then speedily ignored them, deciding yesterday that it had been right all along.

Exactly why the recording industry wants to radically restrict Internet radio eludes me. I wrote just earlier this week, in a review of music-discovery Web sites, that these services are just beginning to offer the music industry a real alternative to the declining broadcast radio business in terms of exposing listeners to the record companies' products. It looks like the music industry remains unable to overcome its inability to understand and deal effectively with technology.

Amen.