A startup indie radio station gains a toehold in an unfriendly universe
Storefront booths, such as East Village Radio in New York, reach millions online – if they can cut legal static.
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You'd think the sky might be the limit for an organically grown station such as EVR deftly leveraging street cred, an easy relationship with artists, and the identity of a bohemian counterculture neighborhood into a burgeoning Internet audience. But EVR general manager Peter Ferraro has to be very careful when it comes to growing his business. The way the current performance-royalty pay structure is set up for webcasters, if EVR's audience numbers do in fact reach the sky, so, too, do their operating costs.Skip to next paragraph
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Under the Congressional Digital Music Copyright Act of 1998, Internet broadcasters are required to pay a digital performance royalty for each and every listener, making it very difficult to scale up their business. By contrast, their terrestrial counterparts benefit from a flat royalty rate: As their audience grows, the cost per listener falls.
"The very existence of EVR in the current royalty climate is pretty punk rock," says Mr. Ferraro, who is trying to avoid the same fate as WOXY, an independent rock webcaster that was forced to shut down earlier this year for ostensibly becoming too popular.
Unlike WOXY, Ferraro is going to great lengths to make sure EVR's revenues – a mix of Web advertising, show sponsorships, and events with corporate sponsors – keep pace with their growing music-licensing costs. As of now, 30 percent of EVR's annual operating costs goes to paying performance royalties. As their audience grows, theoretically that percentage will increase until EVR is potentially snuffed out.
But there is hope: Pending legislation in Congress (the Performance Rights Act) would compensate artists when their performances are played on terrestrial radio (currently, only the composer and music publisher are paid), and offer fixed, discounted royalty rates to small terrestrial broadcasters. Last year, at a meeting of the Senate Judiciary Committee on the bill, Sen. Dianne Feinstein (D) of California said she believed "strongly that parity and fairness require that we provide the same discounts for small webcasters."
Currently, the National Association of Broadcasters and the Record Industry Association of America are negotiating the terms of the proposed legislation. Though a Senate Judiciary Committee source told the Monitor that webcasters shouldn't rely on the NAB to carry their water, the source did say that Senator Feinstein remains committed to webcasters.
If webcasters are included in the bill, Ferraro says there might be a "small business explosion" in the Internet radio space, "a sector that will pay royalties and expose people to music that is often characterized as existing in the 'long tail.' "
"It's like getting on the front cover of a magazine, being interviewed on EVR," says London, an alt-pop artist from Brooklyn whose "Flying Overseas" record will be released by Warner Bros. next month. "They're very pivotal."
Yelawolf, an underground hip-hop artist from Alabama whose appearance on the October/November cover of Fader magazine marks a watershed moment in his career, echoes the sentiment: "These Internet DJs are especially important to underground artists," he says. "They're going to give you the opportunity. They're willing to take risks and put their own opinions and tastes out there.
"EVR was the first radio station and only radio station that fully supported me," Yelawolf says. "If it wasn't for them, I wouldn't be where I am."
Meet the DJs
Just like its broadcast-radio cousin, online radio spawns stars. The show hosts on East Village Radio’s eclectic roster (eastvillageradio.com) get a weekly two-hour time slot, carte blanche, and some interesting experiences in the street-level booth they man in New York.
Steve Lillywhite, “The Lillywhite Sessions,” 1980s, 1990s, 2000s pop and rock
Day job: Grammy-winning producer of U2 and other iconic rock bands
Most noteworthy experience: A fan traveled from California, crashed his show with a cake that said, “Steve, I love you,” and ended up assisting him for the rest of the show.
Joshua da Costa, “Time Time,” punk and psyche rock
Day job: Assistant to an independent record label owner
Most noteworthy experience: He welcomed a passerby back to the city from a stint in prison and played his request, “Do Me Baby” by Prince.
Brian Long, “Infinite Eargasm,” psyche, soul, African, and electronic
Day job: Artist and label manager
Most noteworthy experience: He was robbed of an iPhone by school kids playing hooky.
Nicholas Ray, “The Holy S*** Sound System,” underground rock ’n’ roll
Day job: Clothes buyer
Most noteworthy experience: The actress Juliette Lewis crashed the booth, allowed herself to be interviewed, and then unsuccessfully performed a rap.
Kevin Pedersen, cohost of “Pizza Party,” jangly pop and alt-rock obscurities
Day job: Works in a pie shop
Most noteworthy experience: A “Howard Stern Show” cast member was walking by. Out of curiosity, he popped his head in and ended up co-hosting the rest of the show.