The Copyright Royalty Board this week denied an appeal of their usurious internet radio broadcasting rate decision (see earlier post here), thus sparking a frenzy of lobbying attempts to get Congress to intervene, and causing digital radio broadcasting companies to consider other legal options. The broadcasters have also started petitions, emailed their users about impending doom, and have aggregated it all at www.savenetradio.org.
After speaking with a few folks on the label side, I still get the idea that they are stunned by the decision to grant them their full demands and they are almost at a loss as to what to do. The closest analogy is a salary negotiation - standard tactic is to ask for a larger salary than you believe you deserve since you know that the result will be something in the middle - in this case, the labels got everything they asked for, which realistically should mean the end of free Internet Radio as we know it today, pushing everything back to a paid model, unless it's truly a loss leader.
What's the lesson here? Don't invest money into categories which can be changed overnight by government regulations, especially those lobbied for by much larger companies. All of those investors in online gambling firms are feeling the same type of pain right now as anyone in the Internet radio biz. The question really is "what type of music business would benefit from this big change?"