Internet radio

Internet radio (also known as web radio, net radio, streaming radio and e-radio) is an audio broadcasting service transmitted via the Internet. Broadcasting on the Internet is usually referred to as webcasting since it is not transmitted broadly through wireless means. Internet radio involves a streaming medium that presents listeners with a continuous "stream" of audio over which they have no control, much like traditional broadcast media; in this respect, it is distinct from "on-demand" file serving. Internet radio is also distinct from podcasting, which involves downloading rather than streaming. Many Internet radio "stations" are associated with a corresponding traditional (or "terrestrial") radio station or radio network. Internet-only radio stations are independent of such associations.

Internet radio services are usually accessible from anywhere in the world—for example, one could listen to an Australian station from Europe or America. Some major networks like Clear Channel in the US and Chrysalis in the UK restrict listening to in country because of music licensing and advertising concerns. Internet radio remains popular among expatriates and listeners with interests that are often not adequately served by local radio stations (such as progressive rock, ambient music, folk music, classical music, and stand-up comedy). Internet radio services offer news, sports, talk, and various genres of music—every format that is available on traditional radio stations.

Internet radio technology

Streaming

The most common way to distribute Internet radio is via streaming technology using a lossy audio codec. Popular streaming audio formats include MP3, Ogg Vorbis, Windows Media Audio, RealAudio and HE-AAC (sometimes called aacPlus). The bits are "streamed" (transported) over the network in TCP or UDP packets, then reassembled and played within seconds. (The delay is referred to as lag time.)

History

Internet radio was pioneered by Carl Malamud. In 1993, Malamud launched "Internet Talk Radio" which was the "first computer-radio talk show, each week interviewing a computer expert." However, as late as 1995, this service was not available via multicast streaming; it was distributed "as audio files that computer users fetch one by one."

A November 1994 Rolling Stones concert was the "first major cyberspace multicast concert." Mick Jagger opened the concert by saying, "I wanna say a special welcome to everyone that's, uh, climbed into the Internet tonight and, uh, has got into the M-bone. And I hope it doesn't all collapse."

On November 7, 1994, WXYC (89.3 FM Chapel Hill, NC USA) became the first traditional radio station to announce broadcasting on the Internet. WXYC used an FM radio connected to a system at SunSite, later known as Ibiblio, running Cornell's CU-SeeMe software. WXYC had begun test broadcasts and bandwidth testing as early as August, 1994. WREK (91.1 FM, Atlanta, GA USA) started streaming on the same day using their own custom software called CyberRadio1. However, unlike WXYC, this was WREK's beta launch and the stream was not advertised until a later date.

Some of the first Internet-only commercial radio stations emerged in 1995. NetRadio.net "was one of the Internet's original Webcasters," eventually "streaming more than 100 channels including both music and spoken material." Nonetheless, NetRadio Corporation ceased operations in 2001.HardRadio.com, the world's first .com internet-only station, debuted on New Years Eve, 1995. HardRadio brought many firsts to internet radio through it's founding members decades of experience in over-the-air radio and recording industries.

Another company to emerge in 1995 was Broadcast.com, founded by Todd R. Wagner and Mark Cuban. In 1998, the initial public stock offering for Broadcast.com set a record at the time for the largest jump in price in stock offerings in the United States. The offering price was $18 and the company's shares opened at $68 on the first day of trading. The company was losing money at the time and indicated in a prospectus filed with the Securities Exchange Commission that they expected the losses to continue indefinitely. Yahoo! purchased Broadcast.com on July 20, 1999.

In 2002, the Copyright Arbitration Royalty Panel (CARP) system was initiated by the United States Congress in order to oversee decisions regarding royalty rates and terms, particularly in regard to digital distribution of audio. Many webcasters believed the 2002 proposed royalty structure to be overly burdensome and intended to disadvantage independent Internet-only stations. CARP was later phased out in favor of the Distribution Reform Act of 2004.

On March 2, 2007, the United States Copyright Royalty Board approved a rate increase in the royalties payable to performers of recorded works broadcast on the internet. It was suggested that "while Internet giants like AOL may be able to afford the new rates, many smaller Internet radio stations will have to shut down." It was also suggested that some U.S.-based Internet broadcasts might be moved to foreign jurisdictions where US royalties do not apply. It was therefore predicted that "Internet radio services [were] likely to appeal the royalty ruling to the US Court of Appeals in Washington." Additionally, April 26, 2007, the Internet Radio Equality Act (HR 2060) was proposed to reverse the CRB's decision.

Day of Silence

US Internet broadcasters organized a nationwide coalition to oppose the rate hike and in support of the Internet Radio Equality Act. On June 26, 2007 many of them participated in a "Day of Silence" — either shutting off their audio streams entirely, or replacing their streams with static, ocean sounds or other ambience, interspersed with brief public service announcements — to focus attention on the consequences of the impending rate hike.

Rhapsody, Live365, MTV, Pandora, and SHOUTcast were among the participants in the Day of Silence. Last.FM and Slacker did not participate, saying that they did not want to punish their listeners for the station's problems. SoundExchange, representing supporters of the increase in royalty rates, pointed out the fact that the rates were flat from 1998 through 2005 (see above), without even being increased to reflect cost-of-living increases. They also point to the fact that CBS recently purchased Last.FM for 280 million dollars, and if internet radio is to build businesses from the product of recordings, the performers and owners of those recordings should receive fair compensation. Opponents argued that the purchase price paid for Last.FM reflected that it was primarily a social network service that included a radio service.

Recent SoundExchange Developments

On May 1, 2007, SoundExchange came to an agreement with certain large webcasters regarding the minimum fees that were modified by the determination of the Copyright Royalty Board. While the CRB decision imposed a $500 per station or channel minimum fee for all webcasters, certain webcasters represented through DiMA negotiated a $50,000 "cap" on those fees with SoundExchange. However, DiMA and SoundExchange continue to negotiate over the per song, per listener fees.

SoundExchange has also offered alternative rates and terms to certain eligible small webcasters, that allows them to calculate their royalties as a percentage of their revenue or expenses, instead of at a per performance rate. To be eligible, a webcaster had to have revenues of less than $1.25 million dollars a year and stream less than 5 million "listener hours" a month (or an average of 6830 concurrent listeners). These restrictions would disqualify independent webcasters like AccuRadio, DI.FM, Club977 and others from participating in the offer, and therefore many small commercial webcasters continue to negotiate a settlement with SoundExchange.

An April 2008 survey showed that, in the US, more than one in seven persons aged 25-54 years old listen to online radio each week. In 2008, 13 percent of the American population listened to the radio online, compared with 11 percent in 2007.

An August 16, 2008 Washington Post article reported that although Pandora was "one of the nation's most popular Web radio services, with about 1 million listeners daily...the burgeoning company may be on the verge of collapse" due to the structuring of performance royalty payment for webcasters. "Traditional radio, by contrast, pays no such fee. Satellite radio pays a fee but at a less onerous rate, at least by some measures." The article indicated that "other Web radio outfits" may be "doom[ed]" for the same reasons.

On September 30, 2008, the United States Congress passed "a bill that would put into effect any changes to the royalty rate to which [record labels and web casters] agree while lawmakers are out of session." Although royalty rates are expected to decrease, many webcasters nevertheless predict difficulties generating sufficient revenue to cover their royalty payments.

See also

• Comparison of streaming media systems
• Community radio
• Electronic commerce
• Internet Radio Audience Measurement
• Internet radio device
• Internet television
• Internet stations, list

• Radio music ripping
• Simulcast
• Streaming media
• streaming media systems, list
• Streamium for a history of Philips' Internet radio capable CE-devices

Bibliography

• "VOA: First on the Internet," by Chris Kern (2006)
• Web Radio: Radio Production for Internet Streaming, by Chris Priestman, January 2002, Focal Press
• SaveNetRadio Announcements, by Dave Solomon
• "A Radio Giant Moves to Limit Commercials", by Nat Ives, The New York Times, Monday, July 19, 2004.
• "RadioValve: Local radio station uses fiber-optics instead of FM waves", by Heather Morgan 1998, Boulder Daily Camera
• "Kerbango AM/FM/IM Radio moves us toward The Broadcast Internet From the Ether", by Bob Metcalfe 2000, InfoWorld
• "Business Models on the Web", by Dr. Michael Rappa , North Carolina State University
• "Managing the Digital Enterprise", by Dr. Michael Rappa
• "Will NPR's podcasts birth a new business model for public radio?", by Mark Glaser, November 29, 2005, USC Annenberg Online Journalism Review, Annenberg Center for Communication at USC.
• "Internet Radio: This Year's Business Models" - 2004 Streaming Media West Conference session.
• "Why Are So Many Internet Radio Stations Still on the Air?", by Doc Searls, July 17, 2002, Linux Journal.
• "Digital Dilemma: Will new royalty fees kill Web radio?", by Michael Roberts 2002, Westword
• "Digital, DTV, Internet, Mobile phone and MP3 Listening"- December 2006, RAJAR organisation.
• Olga Kharif, The Last Days of Internet Radio?, March 7, 2007, Downloaded March 7, 2007