Having helped to destory their own industry, the RIAA moves on

Internet radio. You'd imagine the idea of people streaming music on a small scale, to likeminded fans, would be popular with the RIAA. After all, it's a great way of promoting music; the streams without downloads would supply a lot of people with a music fix without soaking up their desire to purchase, and a properly-licensed service would also put some cash into the label's pockets. Virtue all round, right?

Nope. The US Copyright Royalty Board has just announced its rate card for the coming four years - oh, and retroactively for 2006, too. It's delivered what the RIAA asked for. At first, it sounds rather generous - a non-commercial organisation can get a licence for $500.

That's not overly generous - after all, $500 is quite a lot to find for someone who isn't commercial, but still, it's not impossible. However, if you're popular, and listeners clock up more than 159,140 "aggregate tuning hours a month", you're immediately classified as a commercial broadcaster - and will have to find the full commercial rate. Since, of course, a sudden surge in audience could suddenly turn a public service into one seen as a commercial network, you could suddenly find yourself having to pay a hefty sum - despite not having been able to make any money off the broadcasts as you were trying to stay non-commercial.

Even other organisations are going to have trouble - RAIN calculates, for example, that once you're popular enough to be able to sell advertising, you'll have to be paying for licences at a rate higher than you can sell commercials.

In effect, then, the RIAA has set up a system that is unworkable - and net radio companies will be faced with a choice of closing down, or shipping out of the US. Either way, by setting its demands insanely high, the US music industry has managed to throttle yet another potential revenue stream before it even starts.