by Alex Cosper

Internet radio started out in the nineties as the wild west then it went to war with the protectors of the old guard music industry and had to reinvent itself. Now in the 2000s, it is poised to become a powerful medium for people to learn about any kind of music. The term internet radio has grown to mean several things. It can be as radio-like as a program streamed live on the internet or it can be an archive site with on-demand music files. It can simply be a terrestrial radio station's broadcast to a bigger market, or an internet-only operator starting from scratch. It can also be a music store that allows listeners to sample music before they buy it. Many internet stations feature independent music you cannot hear on regular radio as a way of cornering new markets.

Prior to the internet as a popular communications medium, six big corporate record labels controlled the music industry against a backdrop of thousands of indie artists and labels shut out of the process. See also History of Record Labels and the Music Industry. Most big radio hits came from these six big labels (Columbia/RCA/Warner/Polygram/Capitol/MCA), which were all eventually absorbed by or merged with bigger companies. There really weren't more than three major labels until the 1950s. Each of these major labels have been represented by the Recording Industry Association of America (the RIAA) who protect the intellectual property rights and interests of the record labels. The record industry started to create a demand for marketable discs with the masses in the early 1900s and became a league of powerful empires by the twenties, which was the first decade in which radio brought recorded music into people's daily lives.

Corporations gobbled up radio frequencies all along since the beginning of AM radio in the 1920s. But the FCC made rules that one company could only own a few stations in a market, based on an understanding that the public owned the airwaves due to radio's perceived nature as a public service, although commercialism was always a necessary concern in order to pay for the expensive costs of running a radio station. The rules softened in the Reagan administration with deregulation. Then the Clinton administration went a step further in 1996 with the Telecom Act, which allowed about a dozen companies to buy out hundreds of independent stations, as owners could now have up to seven properties in a market. This created a homogenized sound across the dial that may have been one of the reasons radio ratings and audiences steadily began dropping off the following years.

New media also contributed to radio's decline. The internet was mainly an educational and government tool since its introduction in the 1960s. Then the World Wide Web was developed in the 1989-1990 period by Tim Berners-Lee. In 1992 MP3s were approved as the new storage medium for computer audio files, by the Motion Picture Experts Groups. With the web becoming a new medium for popular communication, Congress approved in the early nineties for the internet to be used for commercial purposes.

The first internet radio stations appeared in the mid-nineties with little fanfare. Their arrival was drowned out by the growing popularity of the bigger picture of computers and the entire internet. Early internet radio stations had poor sonic quality, as the internet started over regular phone lines and bandwidth was a huge issue. Terrestrial radio stations and audio firms had the ability to transmit high quality audio over phone lines for years, but with the more expensive ISDN and T-1 lines. Broadband technology gradually was embraced by the general population first with DSL then cable internet, due to more affordable costs.

In 1998 President Clinton signed the Digital Millennium Copyright Act, which laid out specific rules for internet broadcasters regarding use of copyrighted material. The law specifically forbids internet operators from allowing professional recordings to be available for free digital download on the internet without the permission of the copyright owner. In the coming years debates were held between the copyright office, record labels and internet radio operators as to what webcasters should pay in royalty fees to the labels, who owned the recordings, and the songwriters, who owned the songs. The parties finally agreed on a fraction of a penny rate per song, depending on amount of spins and audience size. Many webcasters simply started playing unsigned or small indie label music to avoid paying royalty fees. An example of this was SacLive from 1999-2000, which played the local music of Sacramento, CA nonstop all day.

By the end of the 1990s there were thousands of internet radio stations and music sites online. The most popular became Napster, the online file-swapping site that allowed users to trade music files for free. Mp3.com was another popular site that allowed users to consume music for free. The record industry cried copyright infringement on both companies and proceeded to defeat them in court for violating the Digital Millennium Copyright Act. As a result, new legal models of electronic music distribution emerged. The labels themselves, such as Sony, began to issue their own online music services. Apple Computer ultimately changed the face of the music industry in April 2003 with the iTunes Music Store, offering legal digital downloads of individual songs for 99 cents. Napster began offering a similar service after the legal smoke had cleared and the name was bought by a software company called Roxio.

In the mid-2000s internet radio has become a growing phenomenon, with the number of stations at five figures. There are huge networks such as Yahoo's Launchcast, Live365 and Shoutcast, while there are also individual owners who run their own stations. While a network such as Live365 offers a simple solution for anyone who wants to stream online, running one's own internet station with a dedicated server can be expensive. Not many internet stations have found a way to yet meet these expenses due to small audiences. The key will likely be advertising but advertisers want to reach large audiences through media. Another model might be subscription fees, but it would have to be a highly targeted format to build such a loyal base.

One thing is for sure. People want alternatives to terrestrial radio, which has become too corporate and standardized for the common person's taste. Most people are looking for a degree of diversity, which internet radio certainly offers, while terrestrial radio has been confined to narrow playlists. In the years to come internet radio will certainly become a bigger force in society and may be the first giant step toward world integration and globally-minded content. In other words, while terrestrial radio is busy trying to nationalize networks, the internet itself is actually internationalizing the mindset of the common people.