A while ago, congress passed a bill that requires internet radio stations and streaming programs to pay higher royalty rates to record companies for the use of their artists’ music. This must have been an attempt to get artists a proper payment for all of the use of their songs. However, being the uncaring politicians that they are, they neglected to look into the effects of the bill on the well-established internet radio market.

This bill does ensure that someone gets paid more for each listener of a certain song, but instead of the artists themselves making higher margins, they will see little, if nothing, of the additional profit. The record companies will make most of the profit from this increase in royalties, so the artists are more or less being used, without compensation for it.

Now, the extra profit for the record companies wouldn’t be a problem by itself, but since it will put some internet radio stations out of business, many of which with specific genres whose artists will not be aired elsewhere, it will give the listeners less exposure, and less listeners will find that the like the artist, buying the album. So far, we have that higher royalty rates means less profit for artists. Not cool, huh?

Now, internet radio companies going out of business is a little more than an inconvenience, seeing as they provide entertainment, and exploration opportunities for users. Also, many services, such as Last.fm and Pandora, provide direct links for purchasing songs legally, so artists and record companies alike will, in the end, make less profits.

In the end, raising the royalty rates hurts the artist, listener, and record company. This seems sort of like a bad decision, does it not? I hope that something is done to fix this motion.