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E-Business Secrets
Brian Livingston
Internet radio may become profitable only for the few

A recent decision by a U.S. federal district court judge may doom many small Internet radio operators by requiring them to pay royalties to record labels -- something that broadcast radio stations don't have to do.

Over-the-air stations currently pay royalties to the writers and publishers of each song, not to the record labels that distribute the songs. But Philadelphia District Judge Berle Schiller ruled that labels must be paid a royalty by anyone streaming songs on the Internet, even if the stream is merely the same programming that a radio station already broadcasts on the air.

This development is another result of the Digital Millennium Copyright Act (DMCA) passed by Congress in 1998, which was used by the FBI last month to arrest a programmer who'd broken Adobe's weak eBook encryption. (See No. 7 in News Picks, below.)

The Recording Industry Association of America (RIAA) is seeking royalties of 0.4 cents per song multiplied by the number of Internet listeners, or 15 percent of a site's gross revenues, whichever is smaller. The RIAA already has signed deals with some Internet music providers, including Yahoo and, but the new fees are likely to push all but the largest players out of the music streaming business. Thanks, Congress.

Court ruling may reduce the ranks of music Webcasters:

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E-business book review: from bricks to clicks

The relationship between branding, marketing, and advertising is one that has tripped up more than a few e-commerce sites. The new book "From Bricks to Clicks," by Serge Timacheff and Douglas Rand, does a lot to explain how properly focusing on brand image can make a site's marketing and advertising that much more effective.

Timacheff works for the brand marketing firm The Garrigan Lyman Group, which boasts such clients as Microsoft, 3M, and Starbucks. He and Rand argue that the value of your brand image is determined not by the promises your company makes, but by the promises it keeps. Because a strong brand can make buyers purchase your product or service in preference to those of another company -- even if your prices are somewhat higher -- we're talking the difference between a profit or a loss at the end of the day.

The book argues that brick-and-mortar businesses with an online presence have an advantage over Internet-only sites, but the authors provide numerous examples of e-commerce success stories both large and small. The authors see opportunity for upstarts "where the new brands do not compete head-on with bricks-and-mortar business models but instead coexist alongside them." Good stuff.

"From Bricks to Clicks: Five Steps to Creating a Durable Online Brand,"

By Serge Timacheff and Douglas Rand (McGraw-Hill)

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Livingston's top 10 news picks o' the week

1. Ballmer's hilarious 'monkey boy' video hits the Net

2. How gets 100,000 monthly sign-ups

3. One-third of dial-up users plan broadband this year

4. Hard lessons of switching from free to paid services

5. New site is first to download Java applets to phones

6. 74 percent of online parents shop with their kids

7. How the law against decryption affects us all

8. Company acquires for 17 cents per share

9. Tips on finding a good Web hosting service

10. Eight of the most useful sites for looking stuff up

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This week's 'they can't do that on the web' page has an intriguing user interface that asks you several thought-provoking questions about the kinds of things you'd like in a place to live. The site then recommends a couple of dozen U.S. metropolitan areas or small towns ranked in order based on your preferences. The site makes money through links to job search services and other sponsors. explains how it works:

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E-business secrets: Our mission is to bring you such useful and thought-provoking information about the Web that you actually look forward to reading your e-mail.

About the author: E-Business Secrets is written by InfoWorld Contributing Editor Brian Livingston. Research director is Ben Livingston (no relation). Brian has published 10 books, including:

Windows Me Secrets:

Windows 2000 Secrets:

Win a book free if you're the first to send a tip Brian prints. Send to

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