“Internet radio” is a misnomer. Let’s just call it streaming audio, net audio, or perhaps webcasting. Anything but Internet radio. Terrestrial radio (or “real” radio) does not allow for perfect copies. No matter how good your radio, you’ll never get consistent CD-quality sound. So while radio can introduce you to new songs, music recorded from terrestrial radio is not as good as a CD or even an MP3. Terrestrial radio allows for only a limited number of selections at any given time in a given geographic locale. When the one rap station in your area goes country, you’re out of luck (or in luck, depending on your preferences). This scarcity is what keeps radio stations alive. As an advertiser, if you want to attract local radio listeners, you have a finite number of options. Finally, terrestrial radio is device-independent. You can tune in to your local radio station whether you’re using an RCA made in the 1970s or a Sony made in the 1990s. “Wait,” you say. “The MP3 format is universally supported, so ‘Internet radio’ does have a universal format.” For now that is true. But it may be about to change. SoundExchange, which collects music royalties on the Internet, had faced a swarm of angry webcasters from the moment the Congressionally-appointed Copyright Royalty Board had increased the royalty rate. After negotiations with webcasters, SoundExchange came to an accommodation with webcasters. A SoundExchange press release proclaimed:

SoundExchange has offered to cap the $500 per channel minimum fee at $50,000 per year for webcasters who agree to provide more detailed reporting of the music that they play and work to stop users from engaging in ‘streamripping’ââ?¬â??turning Internet radio performances into a digital music library.

If a report from Ars Technica is to be believed, SoundExchange is angling for DRM as a means to thwart streamripping. The article relies on an inside source:

The source also tells me that DRM is the only plausible “tool” at the disposal of webcasters to accomplish SoundExchange’s goal of working to stop music “streamripping.”

The small webcasters who can’t afford to pay the new royalty rate will be allowed to live if they agree to use DRM. But as any iPod or Zune owner knows, there is no such thing as universal DRM. Imagine the equivalent scenario for terrestrial radio in Silicon Valley. Live 105 (the San Francisco alt rock giant) would come in fine on any radio. You could still listen to KFJC (the Foothill College station), but only if you used a radio made by Audiovox, Grunig, or Samsung. Driving an old Audi with a Blaupunkt? Sorry, no KFJC. If this scenario does come to pass for webcasting, device independence will be gone. For better or worse, webcasting’s last, lingering commonality with terrestrial radio will disappear.