Internet Radio and Business Aviation: Some Big Businesses Would Like to Kill Them Both

By Robert Mark on June 28th, 2007

As an author, I pay pretty close attention to discussions about copyright and royalties. And aviation industry folks should be very afraid too since the Feds at the U.S. Copyright Office’s Copyright Royalty Board are trying to sink Internet Radio broadcasting with huge fee increases much the way the FAA is after business and general aviation with fresh sources of cash.

And sitting in the wings watching the action closely on the broadcast side too are a few large media companies waiting to pick up the pieces, just like the airlines are doing to business aviation.

Small Businesses at Work

Internet Radio stations are traditionally small businesses run by radio junkies who devote their lives to building music libraries and playing tunes to listeners around the world via their broadband link.

These broadcasters truly do march to the beat of a different drum as Thoreau said. They also march in front of plenty of listeners, 10 million at last count through some 10,000 different stations. You can almost hear the cash registers going “ka ching,” at the big media companies that would like to see these annoying little businesses evaporate.

Each time an Internet radio station plays a song, they pay a royalty like any other radio station. Until this new plan by the Feds, most of the small stations were limited in the amount of cash they might be liable for to help drive more business. More stations playing more music for low fees is better than a few stations paying higher fees.

I think they call that competition.

Now, the Federal Copyright Office has suddenly decided that artists should be paid more cash per playing. That means radio stations will need to pay higher fees beginning next month, some retroactive to 2006.

If the legislation makes it through Congress, the increases in radio station operating costs – more than 110 percent in some cases by 2010 – may quickly drive many of these companies out of business.

Not surprisingly, few people in Congress or The White House seems very concerned.

The question is why such a hefty fee increase when no one seemed to be complaining and why now?

User Fees

This should look like a rerun to us in the aviation industry. What really bears close attention is just how quickly the Feds are prepared to raise fees on small operators – five percent over last year, 37 percent this year and 73 percent by the end of the decade. That could be us very soon.

The Feds new proposal will also remove some fee caps on Internet Radio that helped level the playing field between the huge media giants and the small broadcasters.

By the time this fiasco sinks in, some Internet broadcasters believe their overall cost of operations through increased royalty payments could rise between 300 and 1200 percent.

Been There, Done That … Almost

There’s a lesson here for anyone who believes the FAA, the Congress and The White House will do right by aviation if we simply sit back and cross our fingers. The aviation user fee battle isn’t over yet by a long shot.

As an author, I’d sure like to see larger royalties from my books. But I wouldn’t want to sign on if I thought I might well shoot myself in the foot by driving away the vast majority of my customers.

That’s what will happen to Internet Radio with these new fees.

And that’s what will happen to business aviation if the Feds get their way.

Internet Radio and business aviation serve two entirely different audiences. But if the Feds and big business have their way, the result will be the same.

Somehow in this country, we often seem to believe that our efforts often don’t accomplish anything important. Not true.

So don’t simply write your Congressional members … call them … today.

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