Mo’ Money

New royalty rates for streaming music on the Internet were recently announced, causing some Net broadcasters to clutch their hearts while reaching for the nitro pills.

Decided by the Library of Congress Copyright Royalty Board, and retroactive to last year, Internet broadcasters will have to pay .08 cents for each song paid last year, .11 cents this year and .19 cents in 2010.

Up until now, netcasters paid SoundExchange, the organization set up by the Recording Industry Association of America to handle such royalty payments, a portion of their revenue depending on audience reach. Because of this, a small operator with a niche audience would pay less than a major site streaming non-interactive music.

But now the small fry will be paying the same rates as the big boys, which makes one wonder if the new rates are a blessing for large corporations heavily invested in Internet music, a curse for start-ups, or both.

Although the major players will have to pay more money (AOL Music’s bill for one month last fall is expected to be more than $1.5 million), no one is expecting those companies to chuck the online music biz for some other endeavor. For them, online music is just one of many revenue streams, and they can probably absorb the royalty hike as a cost of doing business.

But it’s a different story for the smaller shops, which are almost totally dependent on advertising revenue. With the new rates, several small companies are now saying their copyright payments will exceed revenue, causing many to predict a "thinning of the herd" for mom & pop Internet radio.

For example, AccuRadio, which employs only six people, paid $48,000 in royalties last year. However, that was based on revenue. Under the new plan, based on the number of songs played, AccuRadio’s royalty payment goes up to $600,000, a 1,150 percent increase.

And Jonathan Potter, executive director of webcasting trade group Digital Media Association, said his group was disappointed by the increase, claiming the new rates will raise royalties by 30 percent over the next four years. According to Potter, his group’s member companies are "re-evaluating the viability of the Internet radio business."

But SoundExchange is far from sympathetic.

"They’ve been saying this since 2002, that they were going to go out of business," said SoundExchange spokesman Willem Dicke, adding that the industry has actually grown tremendously.

One industry that might benefit, albeit indirectly, from the rate hike is terrestrial radio. Although radio stations do pay royalties to songwriters, those same broadcasters have never paid the labels for playing music over the airwaves, due to a quid pro quo arrangement hammered out years ago and based upon record labels exchanging royalty-free recordings in return for promotion of those recordings.

But Internet broadcasters have been chipping away at terrestrial radio’s audience over the past few years. So it’s a pretty safe bet that a decrease in the number of Internet radio stations would not be mourned by traditional radio stations.

Of course, the new rates have yet to be carved in stone. Already, National Public Radio, which previously paid a flat fee because of a separate royalty agreement, is trying to determine what it would take to reverse the new royalty decision, according to the Los Angeles Times.

But not everyone is unhappy with the new rates. Even though there are plenty of news stories out there quoting Internet music streamers’ gloom-and-doom reactions to the new royalty fees, there is one organization that is perfectly pleased with the hike.

That’s the RIAA, which sought the rate increase in the first place. But that shouldn’t be news to anyone.

Michael Brennan Is Really Really Cool

Or so say Barenaked Ladies in their latest song, thus guaranteeing the New Jersey resident at least 15 minutes of fame.

It’s all about the download. Or, to be specific, eMusic’s 100 millionth download. It was last December when Brennan downloaded "Diamond Ring" by Mississippi Delta bluesman Fred McDowell from the music service, thus setting the benchmark for those eMusic subscribers following in Brennan’s mouse clicks.

And as a reward for hitting the big 100,000,000, Brennan is immortalized in a new Barenaked Ladies Song.

Titled "Michael Brennan," the song describes the 48-year-old visual artist as independent-minded and curious, names Brennan’s kids and jokingly states that he also "created chips and dip."

But aside from Brennan’s sudden taste of fame, it’s noteworthy to point out that eMusic’s 100 millionth download occurred only 11 months after the subscription music service logged its 50 millionth download.

Unlike other online music stores, eMusic eschews any digital rights management, preferring instead to use the unprotected MP3 format for its downloads. Using a subscription model starting at $9.99 per month for 30 downloads, eMusic deals in music recorded by independent artists.

"Michael Brennan" is currently available as both a stream and free download at eMusic, and will be bundled with the band’s new album, Barenaked Ladies Are Men, on eMusic for the next five months, thus ensuring Brennan’s legacy for the ages.

Out Of Tune

Close but no cigar.

That’s the word over compatibility problems between Apple’s iTunes software and Microsoft’s new Vista operating system. Evidently, Apple has cleared up most of the problems between its software and Microsoft’s, but there’s still a few bugs yet to be worked out.

Apple posted a warning on its Web site when Microsoft first shipped the new operating system saying iTunes and Vista weren’t quite operating in perfect harmony and warned iTunes users to hold off from upgrading their computers to the new OS.

But Apple removed that warning March 5th, stating that the latest version of iTunes – v7.1 – will work with most editions of Vista. However, the latest iTunes fix is far from perfect, for Apple also warned of possible iPod corruption when the player disconnects from a computer.

And there are other problems. For instance, in its latest warning, Apple said some users might experience difficulties syncing Windows contacts with iPods.

So, most problems have been corrected, and running iTunes and maintaining your iPod with a computer running MS Vista shouldn’t be a problem. Right?

That is as long as you never disconnect your iPod or try to port a contact list from your computer to your player. At least until Apple and Microsoft start singing the same tune.

But at least iTunes will work with most versions of Vista. And when you consider who makes Vista, that’s a major accomplishment in its own right.