ThereIsNoRadio.com has to choose between fewer listeners and surviving or more listeners and shutting down.

It’s Good To Be The King, or at least so in the world of the RIAA, where their arms-length entity SoundExchange can cajole a three person panel to remain within a strict interpretation of their mandate and dictate that only one parties requested terms will be the acceptable terms for the buyer/seller relationship. The CRB’s ill-considered position will effectively close down an entire category of mutually-beneficial business - and this is serving the artists and the enthusiastic listeners who buy their CDs and go to their concerts (and US-based Internet radio stations) how exactly?

ThereIsNoRadio Now Listed on iTunes Radio

I received an email from iTunes today that would have had me dancing around the room six months ago, but today gives me a very different reaction. Today I was notified that my internet radio station, ThereIsNoRadio.com, has been added to the iTunes radio station directory and my reaction is a lot more fear than joy. This will increase listenership to the station dramatically over the coming weeks. What’s wrong with people listening to the station you ask? Isn’t that the goal of a radio station? Well, yes it is, but with the new royalty rates looming over the heads of mine and all other internet radio stations; new listeners, at the rate they will come through iTunes, could very well mean the death of the station.

With only 100 streams filled 24 hours per day and 7 days per week and averaging about 16 songs per hour, we are looking at paying royalty rates of $42 per day, $295 per week, $1,182 per month and $15,375 per year. We have well over 100 streams to fill so our royalty costs could easily more than double. We have never attempted to make money with the station. One of our goals has been to make enough money to continue to break even as we gain listeners and add slots. Currently I spend out of pocket about $250 per month between costs to stream, website hosting, and royalty payments. We make about $20 per month for ads and have never come close to breaking even. My day job currently funds almost all of the station expenses.

Our station is different from lots of internet stations in that our primary objective is talk radio. Our talk shows run in the evenings and the guys running these shows do it for a love of radio. They do not get paid for their efforts, but they are the reason most people tune into the station. We do play music throughout the day and late nights to fill time between talk shows. Because we don’t run commercials, the talk show hosts run music when they take breaks to rest their voices.

The cost of playing RIAA bands has now gone out of the range of what we can afford and we will be concentrating our future efforts on independent bands. It is interesting that the laws of the United States seem only to be obeyed when it benefits the record companies. The record companies who have been illegally paying FM radio stations to play their music for the promotional value of radio are now requiring internet radio to pay them for the same promotional value.

We could switch formats to 100% talk radio with no music, but for some reason, we would still have to pay music royalties because we are an internet radio station. The real talents aired on the station, the talk show hosts, will continue to go unpaid.

We have banded together with other internet radio station owners at www.WebcastersUnite.net and www.SaveNetRadio.org to fight these unreasonable royalty rates. Make no mistake, we are not asking for a free ride. We understand and accept that royalties are part of the cost of doing business. Artists should be paid for their work at a fair market price. The current market price is out of our range, so ThereIsNoRadio and many other internet radio stations will soon be going to another vendor (the independent artists ) for a similar product at a better price.

The addition of our station to the iTunes directory has been a goal of ours for awhile and I am both happy and proud that we have achieved it. It is unfortunate that to keep our station on the air, we may now have to have that listing removed to keep both our listenership and costs down.

Badmonkey

Any business operator will tell you that to remain competitive, or in this case, remain in business, one has to find ways to ensure your costs remain at an level acceptable to your owners and investors, even if you operate at a loss for a period of time - just ask Sirius or XM Radio.

And when your costs exceed what you are willing to endure, or the demand for your product isn’t matching expectations, you either find ways to reduce costs, or you shut down (see also Iridium, Excite@Home and an infinite number of tech startups).

Getting added to the iTunes radio directory is a pretty big deal, so ThereIsNoRadio.com doesn’t seem to have a problem with developing a demand for its product. With costs projected to outstrip the benefits of what will surely be a sudden rise in demand, it looks like Badmonkey must turn away from all that new business unless he can find a way to give the RIAA, a minor supplier of content, the boot.