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washingtonpost.com
A Chorus of Angry Piggies
Web Broadcasters Endangered by Royalties, KPIG Fans Say

By Jonathan Krim
Washington Post Staff Writer
Saturday, August 10, 2002; Page A01

WATSONVILLE, Calif. -- The battle over Internet broadcasting is raging right here, in a place they call the Pig Sty, in a town that mostly caters to food-packing businesses and farmworkers who toil in the surrounding fields of strawberries, artichokes and cabbages.

It's KPIG-FM, beaming a mere 5,500 watts (WTOP-AM in Washington is 50,000 watts), but which has achieved international cult status thanks to the Internet, an eclectic playlist of American music and a devotion to all things porcine.

In 1995, Pig Radio ("107 oink 5" on the dial) became the first commercial radio station to simultaneously stream its broadcast over the Internet. By this year, KPIG was averaging 200,000 Internet listeners per month, about 1,800 at any given time, often at their desks at work.

Then, last month, KPIG and many other radio stations pulled the plug on their webcasts after a federal ruling requiring royalty payments to record companies for songs played over the Internet. Many webcasters said the payments would put them out of business and were another example of the music industry trying to crush Internet competition.

The activist outrage of fanatical "piggies" and listeners of other small broadcasters and Internet-only music stations has become a public relations nightmare for the powerful recording industry.

Although both sides this week appealed the ruling by the librarian of Congress -- the recording industry argues the royalty rate should be higher -- a group of webcasters met privately with industry officials last week to try to negotiate an agreement that would reduce the costs. People familiar with the talks said they are cautiously optimistic a deal can be struck.

"We've been working on trying to create a small-webcaster type of license," said John Simson, executive director of Sound Exchange, the arm of the Recording Industry Association of America that negotiates licenses for copyrighted works. "We'll wait and see how those talks progress."

The royalty battle is one of the many thorny issues of copyright and intellectual property that is polarizing the development and distribution of digital music and video over the Internet.

The RIAA already had drawn the enmity of the Internet community for its relentless and largely successful pursuit of Napstser and other music file-sharing services that enabled users to copy music and trade with each other online. The courts have ruled that the system violates copyright laws by redistributing music that was only paid for once.

Putting radio broadcasts on the Web is not about copying. Unlike their European counterparts, U.S. broadcasters pay royalties only to the writers and publishers of songs, not to the performers through their record companies. But at the urging of the music industry Congress decided that that exemption should not apply to digital music, setting the stage for failed negotiations and then an arbitration over an appropriate royalty rate.

When the congressional librarian ruled that webcasters should pay .07 of a cent per play to the labels that own the songs, a cut from an arbitrator's determination of .14 of a cent, KPIG joined pure webcasters such as Beethoven.com and Ultimate80s.com in mobilizing listeners to convince Congress and the recording industry that even the lower rate would destroy Internet broadcasting.

The Internet Radio Fairness Act, a bill that would slash the rates for webcasters, has been introduced in the House by Reps. Jay Inslee (D-Wash.), George R. Nethercutt (R-Wash.) and Rick Boucher (D-Va.).

Of equal concern to the webcasters are possible requirements pushed by the recording industry that would force them to provide the music labels with extensive documentation of what programming is being played and when.

"That alone would destroy the [webcasting] industry," said David Landis, head of Ultimate80s.com in Los Angeles. The congressional librarian has yet to issue final rules on the documentation issue.

Landis, who estimated that he would have to pay more than $10,000 a year in royalties, has nonetheless decided to continue webcasting in hopes the rate will be revised. In the meantime, he and others are running up the royalty bill, which will be retroactive to when they began webcasting or to 1998, when the law took effect.

But many radio stations stopped webcasting, including KPIG, whose owners determined that the roughly $4,000 per month in fees would be too much for the small station to afford.

The waiting is agony for people like Kate Bell, who quickly e-mailed the station from Australia when the webcasts were cut off.

"Pass the razor blades," she wrote. "Life is no longer worth living."

A sad and angry Brian in Hong Kong e-mailed: "Praise the lard and pass the ammunition."

Al Boehmer of Annapolis, who works on communications systems for area hospitals, joined a cadre of fans who made KPIG a part of their lives beyond just tuning in. He travels to California for the station's annual Texas Uprising and Swine Soiree, a concert festival that has become a pilgrimage for fans from around the world.

In the process, Boehmer and others have become good friends with the handful of station deejays, who often put the visitors on the air. One deejay married a listener from Paris who came to visit the station.

"It's devastating for a lot of people," said Boehmer, 50, who discovered KPIG three years ago and made it his only source of radio. "I feel like it's corporate America trying to knock out the little guy for an extra buck."

KPIG's primary draw is a mix of Americana rock, blues and bluegrass rarely heard on the increasingly automated, ever-consolidating commercial music stations that serve the lion's share of the country.

But the station also provides a homespun, playful community that appeals to local and Internet fans alike.

Listeners can call the Swine Line (724-PORK) to leave announcements of everything from local doings to refrigerators for sale. These Hog Calls are interspersed with songs on the air, while an active online chat room offers a forum to post Squeals. Participating businesses offer discounts to holders of Lard Cards. Images from the Ham Cam, a Web camera showing the deejays at work, can be viewed on the station's Web site.

Going online was the handiwork of Bill Goldsmith, who spent $5,000 of his own money to set up the system when he was a deejay at KPIG. Goldsmith now runs RadioParadise, his own Internet-only station.

"We didn't even know quite what he was doing," said program manager Laura Hopper.

Hopper said the music industry is hurting itself by its hard-line stance.

"Our listeners buy CDs," she said from the KPIG studio in a two-story, motel-like structure behind a Chinese restaurant and next to a car dealership. "They complain to me that by listening to KPIG, they've spent more money on CDs than ever."

Indeed, part of the difficulty in resolving the royalty controversy is that there is disagreement even within the opposing sides.

Some artists, such as singer Janis Ian, oppose the digital royalty fees and the fierce opposition of the major record labels to music downloads.

"If a music industry executive claims I should agree with their agenda because it will make me more money, I put my hand on my wallet and check it after they leave, just to make sure nothing's missing," she wrote in an article in trade magazine in May.

Other performers have urged listeners to stop stealing their music.

One small record label, Artemis, announced two weeks ago that it would forgo royalty payments for a year, to provide struggling webcasters time to work on the issue.

"For one year, it's a no-brainer," said Artemis chief executive Danny Goldberg. "Our artists need the exposure . . . and what was clear to me is that these are small businesses that are helpful to my business."

On the other side, some radio broadcasters argue they should be treated differently than Internet-only stations. And the interests of larger technology and Internet companies pushing into the digital music arena, such as AOL Time Warner Inc. and Microsoft Corp., sometimes differ from those of smaller players.

Defining who qualifies for some type of small-webcaster license also will be tricky, said Jonathan Potter, head of the Digital Media Association, a industry trade group whose members include AOL, Microsoft and some larger Web broadcasters.

Should the threshold be based on station income? Number of listeners or songs streamed? And what's the cutoff?

"We're all trying to figure that out," Potter said.

© 2002 The Washington Post Company

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