Bill Offers Possible Reprieve for Indie Internet Radio

Simson said that, while he'd not seen the Betanews.com analysis, he felt the numbers in the analysis were higher than SoundExchange's projections."I have not seen Beta's analysis but I can tell you that in 2006 webcasting revenue was under $20 million," said Simson. "If rates rise 2.5 times over the next 5 years (8% annualized since 1998), 2.5 x 20 million would equal $50 million. Even factoring in some growth in the webcasting marketplace, $2.5 billion seems just a little bit steep." (Editor's note: Simson bumped the BetaNews number up from $2.3 billion in his email to the author.)

The growth numbers may, indeed, be the primary unknown in the whole equation. While Simson uses an 8% annualized growth rate since 1998, others argue that "this fledgling audio platform" is about to hit the knee on its growth curve, advancing much more rapidly over the next two years than it has in all the previous years combined.

BridgeRatings, a company providing internet radio growth projections, estimates that, in 2006, almost 56.7 million listeners listed to online radio streams each week, as compared to 279.6 million listeners of AM and FM radio each week during that same period.

While Simson has not responded to additional requests for his analysis of the betanews.com or BridgeRatings numbers, his office did issue a press release shortly after the bill was introduced, making known SoundExchange's general feelings about the Internet Radio Equality Act.

"The idea that this bill would help small webcasters or artists is ludicrous since less than 2 percent of all royalty payments in 2006 came from small webcasters," said Simson, quoting a portion of his earlier email statement.

If the BridgeRatings projections hold true, however, with growth rates for traditional radio hovering at 1% per year and the internet radio listener base growing at about 27% per year to a projected 147.5 million listeners per week for streaming radio, the betanews.com analysis may actually be too low.

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