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: Camarillo-based 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 Valencia-based LARadio.com, 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 anti-piracy 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.

Courtesy: NY TIMES