OPINION: An Internet Radio Service Weighs In On The Internet Radio Fairness Act

Posted December 7

Welcome to the O Music Awards guest writer series, a place where we hand the proverbial reins over to qualified writers/musicians/etc and let them share their thoughts about music, technology and more. Today’s guest blogger is Myxer CMO, Mike Carson.

The Internet Radio Fairness Act has been discussed at length and is currently being debated in Congress. The IRFA’s main support comes from Pandora, who wants the royalty rates Internet radio services pay to match those of satellite and cable radio providers. Myxer’s support is in lockstep with Pandora. Those supporting the IRFA believe that Internet radio services like Pandora should be subject to the same royalty rates as their satellite, terrestrial and cable radio competitors. Currently, Pandora pays out over 50% of their revenues to SoundExchange, a non-profit set up by the RIAA to collect royalties from satellite, Internet, cable TV and other similar platforms for streaming sound recordings.

Myxer is aware of and subject to the financial challenges of operating an Internet streaming radio and social entertainment platform and we want to ensure an environment that fosters innovation and growth. Our main concerns are providing Myxer listeners with a great experience and preventing the shuttering of Internet radio services that allow independent artists, who we work with extensively, to reach audiences they can’t access at terrestrial, satellite or cable radio.

Music labels and (some) artists are against the IRFA, as they believe the bill is a direct attack on their respective revenues. The issue is that the model has always been difficult: the more people who use Myxer, the more we have to pay in royalties to continue operating. The model is less than ideal and a popular suggested solution for making up revenues has been to sell more –- or more costly –- advertising.

Myxer believes selling more ads isn’t enough to solve the problem. While increasing revenues may seem smart, additional advertising units can hurt the experience we have created for our users. Listeners don’t want their experience cluttered with an abundance of intrusive ads. In addition to selling ads more effectively, we need to work with our brand and artist partners to deliver entertaining and valuable content to our users. We need to create innovative and profitable solutions that provide an enjoyable experience for our users and promotion for artists. Without users –- or artists –- we don’t have a service.

This must be resolved and the Internet Radio Fairness Act is a step in the right direction. It’s creating a conversation about a serious issue facing the services that have helped countless hard-working bands reach a global audience. There are artists that have seen their album sales skyrocket after having their music available on Internet radio services. Online audiences are also more likely to interact with artists through reading bios, lyrics, looking up concert dates and sharing their experiences via social networks. Online services are not just about streaming content, they are about engaging communities around artists and their content

We need to work together to solve the problem. Whether it is adjusting the royalties paid out to labels and artists, or fine-tuning the way ad units function so revenue can be made up with less intrusive but more salient ads, it will require the entire industry to work together to find the right answer. The solution will not be found in a silo.

The music industry has reached a turning point in the way artists reach fans and new audiences. Myxer will continue working to bring music to the world. If the sides cannot agree on this measure, then it’s time to sit down and have a productive conversation and realize the fate of the industry rests with us. We’re ready to do our part.

Image courtesy for Flickr, tim geers