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Copyright Review Board denies streaming music appeal

The web news services are reporting that the Copyright Review Board today denied the appeal by Internet streaming music services to reconsider the CRB ruling regarding per-play fees that threaten to put these services out of business.

The CRB decision stated:

" ... none of the moving parties have made a sufficient showing of new evidence or clear error or manifest injustice that would warrant rehearing. To the contrary ... most of the parties' arguments in support of a rehearing or reconsideration merely restate arguments that were made or evidence that was presented during the proceeding."

So much for pricing set by a willing buyer and seller in a market transaction!

The judges did agree to allow the streaming services to estimate their audience using Aggregate Tuning Hours for 2006 and 2007 to allow implementation of systems to record the number of tracks played per listener (necessary to comply with the new royalty rates that are per track, per listener).

Unless the Court of Appeals agrees to hear an appeal, this is going to need a rethink in the business models of the streaming music services. As I wrote last month, I suspect that there will be a move to subscription services for Internet Radio. Assuming some appropriate clarification about the definition of a "channel" is made, even at the 2010 rate of $0.0019 per track, a $9.95 per month subscription at 50% margin would pay for 2,618 tracks for a listener – at 3 minutes average per track that's over 130 HOURS of music per month!

Watch for changing business models in Internet streaming music – this is reminiscent of the first wave of Photo hosting sites during the bubble that had to make the move to subscription or print sales to pay for all the disk space being consumed. Evolution at work!

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STU PHILLIPS
MENLO PARK, CALIFORNIA

Intense Brit, lived in Silicon Valley since 1984. Avid pilot, like digital photography, ham radio and a bunch of other stuff. Official Geek.

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