Webcasting is the non-interactive streaming of digital audio on the internet, sometimes called "internet radio". The technology can be used to transmit all kinds of content including live talk, musical performances, sporting events, and pre-recorded music.

Webcasting offers the possibility of almost unlimited choice, while broadcast radio is profoundly constricted by the limited broadcast spectrum. The number of channels available on standard AM/FM radio is generally limited to a couple of dozen choices. Those choices are further limited by the current domination of commercial radio by a handful of corporate conglomerates including Infinity Radio and Clear Channel. A great deal of mainstream commercial radio sounds like one long commercial “interrupted” by shouting shock jocks and right wing commentators.

Webcasting makes it possible for a potentially unlimited number of independent voices transmitting a virtually unlimited amount of programming, including music. In addition, one webcaster can provide an incredibly broad range of different music “streams”. And because it is delivered through the internet, it can reach a worldwide audience.

According to recent studies by Arbitron and the General Accounting Offices, the number of listens to webcasts is growing and has at least doubled over recent years. In regard to music based webcasting, many experts agree that as more people elect high-speed broadband Internet access, and as consumers upgrade their home entertainment systems, the potential for internet radio and webcasting is unlimited.

Yet the recording business has been criticized for insisting on higher royalty rates and minimum fees for webcasting recorded music. Those rates are higher than those charged by the music publishers (through ASCAP, BMI and SESAC) for songs. Dozens of small webcasters have signed up for new rates negotiated by Sound Exchange, the not-for-profit designated to negotiate rates for webcasting music.

Among a certain group there is continuing unhappiness. The Webcaster Alliance, an association of approximately 400 small webcasters, filed a complaint in 2003 in the U.S. District Court for the Northern District of California alleging anticompetitive conduct by the Recording Industry Association of America (RIAA). The crux of the complaint is that the new rates eliminate the commercial viability of most small commercial webcasters by imposing unreasonably high minimum fees. In April 2004, the district court granted the RIAA's motion to dismiss. Webcaster Alliance Inc. v. Recording Industry Association of America Inc., C 03-3948 WHA. The plaintiffs are appealing the ruling.

Webcasters contrast the minimum fees charged by SoundExchange for recorded masters to the rates charged by the U.S. performing rights societies, i.e., ASCAP, BMI and SESAC for the use of songs. The ASCAP BMI and SESAC minimum fee total less than a $1,000 per year for musical compositions. But the deal negotiated by Sound Exchange is $2,000 for recordings. And that rate is set to escalate to $2,500. Also, the three PRO's royalty rates add up to approximatley 5% of gross income, while the SoundExchange rate for recordings is 10%.

Do you listen to any webcasts?

Do you think that webcasting has the potential that I think it does?

Do you have a point of view on whether the record labels are overcharging for recorded music on webcasts?