WASHINGTON–Musicians, recording executives, Internet radio entrepreneurs and advocates of traditional broadcast painted a varied and complex American audio landscape during a U.S. House committee hearing Wednesday.
“My how the industry has changed,” said Rep. Greg Walden, R-Ore., a former radio broadcaster.
Satellites, the Internet and mobile phones have dramatically altered the way people purchase and listen to music, according to industry experts.
In 2004 the recording industry earned a grand total of $190 million from digital services, according to the Recording Industry Association of America. In 2011, that number totaled nearly $3.5 billion, and today the music business earns more than half of its revenues from digital products, according to the RIAA.
“The music industry today has transformed how it does business,” said Cary Sherman, chairman and CEO of the Recording Industry Association of America. “And we expect the industry to continue to evolve, enabling new artists to prosper and allowing consumers to enjoy their works in many different ways.”
Advocates for online broadcasting emphasized the variety it allows.
“The future of audio is mobile, it is personal, it is what the consumer wants it to be,” said Christopher Guttman-McCabe, vice president of regulatory affairs at CTIA, an international nonprofit that represents the wireless communications industry.
To ensure continued innovation and job growth in the evolving audio industry, Guttman-McCabe called for a “light regulatory touch,” in which questions like whether to continue to install FM radio in mobile phones would be left to consumer demand, not government mandate.
Entrepreneurs at the vanguard of Internet audio broadcasting testified that musicians now connect with audiences in ways they never could when terrestrial radio dominated the public’s attention.
Pandora, an Internet radio service, now plays the music of more than 100,000 artists–70 percent of which are independent musicians–represented by a catalogue of more than million songs, according to Pandora founder Tim Westergren.
“It is conceivable that this new promotional vehicle, if it continues to grow, may eventually lead to the emergence of a musician’s middle class,” Westergren said.
But change does not come without growing pains, and the fractured industry now struggles with the question of what role, if any, traditional FM radio plays in today’s web-enabled world.
“Radio works because it builds relationships with its listeners,” said Steven W. Newberry, president and CEO of Commonwealth Broadcasting Corp. “We are far more than just music, far more than just news and information. We are part of the fabric of American culture and its families.”
The traditional broadcast service provides news and entertainment to the public for free, and is an important communications tool in times of crisis when Internet access may be limited or unavailable, Nebwerry said.
FM radio offers a free alternative to the increasingly crowded broadband spectrum, said Jeff Smulyan, CEO of Emmis Communications, which owns and operates radio and magazine entities throughout the U.S.
“The data consumption of the American public is growing at staggering rates and the question that really needs to be asked is, ‘Is this the best way to entertain the American public?” Smulyan said.