In April 2005 Backbeat will publish my book, THE FUTURE OF THE MUSIC BUSINESS: How To Succeed with the New Technologies, A Guide for Artists and Entrepreneurs. The excerpt below is from the chapter on webcasting, and focuses on why webcasting is becoming more popular and more important. The balance of the chapter details the rules that apply to clearing masters, i.e., the statutory license under the DMCA that allows eligible webcasters to play any record without negotiating with the labels, and the blanket licenses that apply to songs available from ASCAP, BMI and SESAC.

WHAT IS WEBCASTING?
Webcasting, sometimes referred to as “Internet radio,” generally refers to the non-interactive streaming of audio on the Internet. The content can originate from various sources including live or pre-recorded talk, live musical performance and sporting events, and pre-recorded music. There are basically two types of webcasts: stand-alone Internet streams, and radio stations that simultaneously broadcast and stream their programming online.
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WHY IS WEBCASTING IMPORTANT?
One of the most exciting things that webcasting offers in terms of music is the enormous variety of programming it can provide. Broadcast radio is profoundly constricted, compared with the Internet, by the limited broadcast spectrum. The number of channels available on standard AM/FM radio is limited in most locations to a couple of dozen choices. Those choices are further limited by the domination of commercial radio by a handful of corporations such as Infinity Radio and Clear Channel. A great deal of mainstream commercial radio sounds like one long commercial “interrupted” by shouting shock jocks and conservative talk show hosts. Webcasting makes it possible for a potentially unlimited number of independent voices to be heard. The Internet can also provide each webcaster a virtually unlimited number of channels.

Internet radio, as opposed traditional broadcast radio, offers listeners an unlimited number of musical choices. Tens of thousands of Internet radio stations are available on the Web. For a sample of the variety, check 365Live (www.365Live.com) or Launch Music (www.launch.yahoo.com). The music is diverse as the not-for-profit and commercial operators running the stations. Live 365, for instance has thousands of independent operators each programming their favorite form of music whether it be classical, rock, hip-hop, jazz, dance, Latin, folk, world, etc. Launch, on the other hand, has one programming department whose job it is to see that every music taste is represented.

The day before I delivered this manuscript to the publisher, The Sunday Magazine of the NY Times ran an article titled “Easy Listening: A California Radio Station Leverages Its Tastemaker Status Nationally by Going Online” by Rob Walker. The article pointed out that KCRW.com is trying to make “new media and old media” allies rather than enemies by building an online listener base throughout the country. KCRW, member-supported, non-commercial station based in Santa Monica, has long been known for the diversity of music that it plays and for giving time to artists that cut across a wide swath of genres from singer songwriters to club favorites and indie rock. The station claims that it was the first to play Norah Jones, and the first in the U.S. to play Dido and Coldplay. The article reports that as commercial radio has become increasingly “timid, canned and predictable,” there is an opportunity for a station like KCRW to leverage its tastemaker status by going online. The article further points out that “while satellite radio is providing one alternative, it’s built on the idea of restricting your tastes one genre at a time. So stations like KCRW (along with Philadelphia’s WXPN and its syndicated “World Café” show and a few others, like WFUV in the Bronx) are now crucial to idiosyncratic bands like Brazilian Girls and the small record labels that promote them and the music consumers who want to be surprised.

As the story about KCRW illustrates, another important thing about Internet Radio is that it is not limited by geography the way standard radio is. Generally, the strongest radio signal can only travel a few hundred miles. Webcasters, on the other hand, can reach the entire world. A listener can hear the same webcast in Texas or Tunisia, or anywhere else in the world with an Internet or satellite connection. Many experts agree that as high speed Internet access continues to permeate society, the potential growth for Internet radio and webcasting is practically unlimited. According to a June 2004 study by the General Accounting Office (GAO), the audit, evaluation and investigative arm of Congress: “The popularity of webcasting is growing, with the number of listeners tripling over the past three years.”