Digital Home Thoughts: Internet Radio Finally Can Let The Music Play!

"On Tuesday, after a two-year battle, record labels and online radio stations agreed on new royalty rates that cover music streaming. Many of the music sites had argued that the old rates were so high that they were being forced out of business. That could have come back to haunt the record labels, since for many people the sites are becoming a useful way to discover music. “This is definitely the agreement that we’ve been waiting for,” said Tim Westergren, the founder of Pandora, one of the most popular Internet radio sites with 30 million registered users."

It has been a long road, and while the results may not please everyone, an agreement has been inked between web radio stations and music labels. Music streaming has existed on the Internet for years, even in the era of dial-up, but music labels, through an organization called SoundExchange, started noticing the growing popularity of Internet radio and wanted to bill these stations for playing their music. At first, the rates were high, going up to 0.19 cent per song, though finally, after two years of negotiations, they have worked out a deal that seems to have satisfied most of the parties involved. The rates are still much higher than what is paid by radio stations, though to be fair, Internet radio stations do offer a far greater degree of flexibility and interactivity than traditional broadcasting mediums. There are lots of other details I could question. Will musicians, especially the smaller ones, ever see any money generated by this agreement? What constitutes an Internet radio station that must pay these fees? I am mostly just relieved that a deal has been reached that companies like Pandora (which still does NOT serve Canada! Grrrr!) have an agreement that they believe they can work with.