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Piracy patrol turns attack to Internet radio

Published Aug. 28, 2005

The recording industry, which has shut down online jukeboxes and sued individuals to stem massive losses in music sales, now fears songs streamed over Internet radio sites could be pirated.

The Recording Industry Association of America is turning its focus to software that essentially allows listeners to use a personal computer just like a conventional tape deck for AM/FM radio.

But as Internet radio becomes increasingly popular, so does the drive to monitor how consumers receive music.

"The problem arises when people record broadcasts and turn them _ potentially _ into music libraries with songs they haven't paid for," said Steven Marks, general counsel for the RIAA. "And we are very concerned about the actual software that permits people to transform broadcasts into music libraries."

Jambalaya Brands is the manufacturer of Audio Xtract, software that enables consumers to record Internet radio broadcasts. The St. Louis-based company says the recordings are intended only for personal use, eliminating any legal friction that has surfaced for peer-to-peer file-sharing networks such as Napster.

But concern also has surfaced regarding continuous streaming of radio broadcasts versus the transfer of individual music files. That issue is particularly close to Vytas Safronikas, who owns and operates Santa Clarita-based in California. Broadcasting Christian contemporary music 24 hours a day, Safronikas streams the music so listeners receive it much like a broadcast from a conventional radio. The process _ requiring a combination of digital and analog equipment _ eliminates the ability to extract individual music files.

"The quality is probably just as good as an FM station," said Safronikas, who also works as a news reporter for KNX-AM 1070.

Though the RIAA hasn't brought any formal action against purveyors of Internet radio, the Washington-based lobbying group has warned federal regulators about the dangers of high-definition radio. The superior quality could be ideal for pirating, prompting yet another thorn in the side of the music industry.

Such vigilance has its downside, though. Russell Hauth, senior vice president at radio station operator Salem Communications, said the RIAA is using Internet radio as a justification to charge unreasonable royalties. The result: Salem is not streaming nearly as much as it otherwise would, Hauth said.

The Digital Millennium Copyright Act of 1998 dictates the method in which radio stations stream via the Internet. Many executives perceive the act as an overzealous bandage that obstructs more business than it protects. "In many ways the act has put so many restrictions on the broadcaster that many have stayed away from the Internet in droves," Hauth said.

Safronikas pays about $3,000 in royalties on an annual basis. And while the amount is relatively trivial when compared with what a large commercial station pays, Safronikas said he certainly feels the financial effects.

Don Barrett, publisher of, said if people are paying the appropriate royalty fees, there shouldn't be concern about illicit behavior. "And by the time you factor all of the effort the masses go through to record movies and music, people still go and buy the material," Barrett said.

But Jambalaya officials believe the RIAA's agenda is focused on Internet recording devices because other antipiracy campaigns have failed. "When courts recently ruled that peer-to-peer technology is legal, the urgency of the RIAA's other angles of attack were heightened," a company spokesman said in a printed statement.

The RIAA disagrees. Instead, Marks said, companies such as Jambalaya are creating software that enables consumers to slice and dice music, something analog devices were not able to do. And the more popular the software, the greater the risk that people will not pay for music, he said.

Posing a solution is Transmedia, a New York-based company that helps consumers and companies manage audio and video files. Subscribers pay for the service and have access to a multimedia network.

"And then you share the information and get away from the problem of duplication," said Donald Leka, chairman and chief executive officer. "People need to start getting behind the idea of sharing as opposed to being reactive."