Looking for the Value Proposition

Even if Royalties for Web Radio Fall, Revenue Remains Elusive (pdf)

The two sides have signaled that they are nearing a compromise that would lower the royalties that online radio stations pay artists and labels for the rights to stream songs to listeners. On Sept. 30, they jointly persuaded Congress to pass a bill that would put into effect any changes to the royalty rate to which the parties agree while lawmakers are out of session.

Still, even if royalties decrease as expected, webcasters must figure out how to bring in enough revenue to cover the costs.

Whether run by scrappy start-ups or big media organizations, Internet radio stations have never found a way to make substantial money from streaming music that listeners expect to hear free. […]