Sound Off: WHPK and the battle for web radio

WHPK Office, shot by Lisa Bang

College radio is a strange little place. Weirdness seems to come with the territory for an activity that draws people who really dig sitting in a room by themselves for long periods of time in the wee hours of the morning, playing records–yes, records, on vinyl–that they simply want to share with the four people who might be listening to their show. Sometimes friends will show up to burn CDs, or out of sheer curiosity, but at its base, it is a solitary, highly personal activity. When entering South Side radio station WHPK’s record library, you are struck by the layers of dust covering floor-to-ceiling shelves of records and CD cabinets. Almost every piece of music has been lovingly (or angrily) reviewed by at least twenty years’ worth of DJs, and arguments have exploded onto the covers of particularly contentious records (see Shellac’s entire discography). It’s clear that music is not just a passive pastime for those who partake in this bizarre and anachronistic hobby; but for some reason, it occupies a much larger part of their hearts than your average iPod Shuffle user. University of Chicago students in the radio station take to uncovering obscure and brilliant periods of music with the same zeal and nerdiness that others attach to literary criticism or physics, and it makes for passionate, one-of-a-kind programming.

Unfortunately, there aren’t that many students who can listen to it. Readers, raise your hand if you own a radio. Now put it down if it’s part of your alarm clock. In the United States, at least, radio is clearly no longer the cutting-edge mass communications that it used to be. Radio aficionados fortunately have the prospect of webstreaming to save us from the dark caverns of obsolescence–as radios are a dying breed, computers are reaching their maturity. After a six-year process of legal battles, internecine fights leading to the loss of crucial information, and general administrative hassles, WHPK 88.5 FM Chicago is finally ready to put itself on the web by the end of the academic year.

The hard-fought victory is bittersweet, however: right as all the plans to webcast were finalized, the Copyright Royalties Board–a group of judges who decide who pays how much for the rights to copyrighted materials–passed down the new rates for 2006 to 2010. Their ruling struck major and minor webcasters into stunned shock, and industry fat-cats over at SoundExchange, the group that collects royalties payments and distributes them to labels and artists, let loose the champagne streams in celebration. Previously, large webcasters paid royalties on a basis of average listener-hours while small webcasters paid as a flat percentage of their revenues. The new rates include a fee paid each time a song is played and listened to, starting with $0.0008 per song in 2006 and jumping to $0.0019 in 2010. That may not sound like much, but consider that your average rock or pop song is about 3 minutes long, that many, many users can listen at once, and most radio stations are running twenty-four hours a day, seven days a week: it adds up. The locally-based online radio station AccuRadio, as cited by the Chicago Reader, had revenues of about $400,000 last year; under the new laws, their royalties payments would be around $600,000. In addition to the per-song, per-listen payments, stations have to pay $500 per channel for licensing fees. Large webcasters such as AccuRadio only have several hundred channels, but programs such as Pandora that allow users to create up to 100 channels apiece would be crippled by the fees. Clearly, this would cause many stations to go out of business, and during the deliberations, many large webcasters such as AOL-Time Warner and National Public Radio (NPR) pressed for a provision that royalties fees could not exceed revenues. The Copyright Royalties Board rejected that proposal, saying that performers would not be fairly paid otherwise. They seem to fail to notice that performers will not be paid at all if stations are forced to go off the air.

For WHPK members in Mitchell Tower at the University of Chicago, all is not completely lost. Even if these fees pass into law uncontested, WHPK will most likely be protected from the exorbitant commercial per-song/per-listener rates because it is a small, noncommercial college station. In setting the distinction between commercial and noncommercial stations, the Copyright Royalties Board calculated the average number of simultaneous users for NPR-based web stations and came upon the number of 218 simultaneous streaming listeners. Any noncommercial station who has less than this number of listeners will only have to pay the $500 licensing fee, but anything beyond that, they will be subject to the commercial per-play rates. WHPK does not expect to have more than 40 streaming listeners at once, at least in the beginning, so they should at least be able to stream. However, it will be seriously detrimental to larger noncommercial stations that provide important educational and cultural services. The Copyright Royalties Board takes a strictly market-based approach to determining their fees in their decision, and regarding noncommercial stations, they believe that they should only be gifted with lower rates if they have a different “sub-market” than commercial stations–and that simply should not be the way noncommercial broadcasting should be approached. A little more probing into the world of economics would come up with the concept of market failures that the public sector must correct since the laws of supply and demand would not support these services otherwise. The very fact that there is a distinction between commercial and non-commercial stations imply that the latter exist to address market failures–the fact that they are peddling educational information, specialty music, and niche programming as opposed to pop music and heavily advertised airwaves means that without that distinction, it would difficult for them to exist in the market. While the CRB tacitly accepts the major differences between non-commercial and commercial stations, such as a “mission to provide educational, cultural, religious and social programming not generally available on commercial venues, […] different sources of funding, such as listener donations, corporate underwriting or sponsorships, and university funds” they also insist in the documentation of their decision that with the advent of webcasting, the distinction between the non-commercial and commercial sectors are blurring. They say that public and college radio stations “no longer face a limited geographical audience […] so that such stations may compete with commercial webcasters even ‘worldwide’” and that “some college radio stations use the Live365 service to stream their simulcasts, making them just another consumer choice available on Live365 along with numerous commercial stations.” They thus conclude that noncommercial stations can be competition to commercial stations’ market. None of the objections they raise about the increasing convergence of the two markets change the fundamental differences between noncommercial and commercial stations that they mentioned earlier: they are still non-profit, they are still advertisement-free, and they still provide quality programming that wouldn’t be supported by the market, so their submarkets are different by nature. It seems highly unlikely that WHPK’s Throbbing Gristle fans would ever “cannibalize” the webstreaming market because of overprotection, as the Copyright Royalties Board fears–there are still thousands more people who would rather listen to Jack Johnson on AOL-Time Warner’s stream.

But there is still greater hope. Those who support the Copyright Royalties Board’s decision are on the disadvantaged end of an essential law of politics: he who can buy the most votes will win. Their supporters are mainly the Recording Industry Association of America (RIAA) and SoundExchange, and the RIAA is hemorrhaging money by the year because of the decreasing popularity of CDs and other musical media. On the other hand, the opponents are some of the biggest power brokers in the world: AOL-Time Warner, Yahoo!, Microsoft, National Public Radio, and coalitions of highly-moneyed religious broadcasters, among others. A broad-based bipartisan opposition has arisen in the House of Representatives and Senate of the United States, and both have introduced bills–The Internet Radio Equality Act–to overturn the CRB’s rulings and set the royalties fees equivalent to the much-lower ones of satellite radio. The fees are set to take place on July 15, so if you’re interested in protesting, time is running short. Check out the online coalition they’ll help you contact your senator and congressman to get them to support the Internet Radio Equality Act.

In the end, maybe the CRB’s rates will not come into effect and all will be well. Perhaps in anticipation of this, the RIAA is gearing up for another attack on radio–this time, however, on terrestrial FM radio. In the United States, copyright owners only have performance rights on digital transmissions such as cable, satellite, and internet radio, but the RIAA is looking to change this. It’s bewildering why the sudden attack on the various forms of radio is suddenly happening. Why would artists want to get rid of such an effective venue for free promotions? Well, most artists don’t, especially independent artists. Web and college radio allow obscure artists to be heard beyond their hometowns and it allows them to compete somewhat with artists supported by enormous media conglomerates. Keeping that in mind, it’s hard to see this as anything other than an attack on independent music by the monolithic dinosaurs of the music industry. They are scared that it’s now too easy for people to learn that they churn out crap and that nerdy college kids uninterested in profit can provide better alternatives in tiny, dusty studios. The secret is out: big artists and record labels are not competitive, either in content or in form. Instead of trying to compete with digital media, CDs remain stubbornly overpriced and the RIAA scrambles for government protection against the forces of good. Certainly the Copyright Royalties Board would agree that competition in the market is a way to force improvement in a given field. This lesson is clearly bitter medicine for the RIAA–but they’re going to have to swallow it sooner or later.