You Play, They Pay

How much should it cost Internet radio operators like Jim and Wanda Atkinson to satisfy your cravings for streaming rock & roll?

You can tell the instant The Voice pipes up between songs: Jim Atkinson's a radio guy. "Hi, it's Jim," The Voice says, humming like a power chord from a seasoned Les Paul. "Stay tuned for new music from Mastodon, the Decemberists and Chin Up Chin Up."

For Atkinson it has always been radio. As a teenager in the '60s, he used to call the DJs in his hometown of Lansing, Michigan, to talk about the Kinks and the Stones. By sixteen he was driving a hundred miles to fill weekend shifts on a nearby station. In the 1970s, the salad days of free-form FM rock, when King Crimson segued into the Who and then to Head East, when "Stairway to Heaven" stoked many a backseat grope, Atkinson generated the soundtrack, dropping needles into grooves and letting them lock till the record ended.

When he wasn't on the radio, Atkinson was pushing rock as a part-time clerk at a record store at the Lansing Mall. That's where he met Wanda, recalls Jim, now 50, taking a smoke break outside the single-story brick building on the Hill that houses his Internet radio station, 3WK. "She was working at Montgomery Ward, came in with a friend to buy a record — it was her friend's birthday or something."

Jim Atkinson says he bailed on FM in 1993 because of "the potty-mouth humor and the stupid way that being an announcer was headed."
Jennifer Silverberg
Jim Atkinson says he bailed on FM in 1993 because of "the potty-mouth humor and the stupid way that being an announcer was headed."

A rusted Toyota cruises past, spitting Christina Aguilera from a ten-dollar car stereo.

"It was my birthday," corrects Wanda from her desk just inside the door. It was a Pointer Sisters record, she thinks. "We were meant for each other," she laughs.

Wanda favors wire-rimmed glasses and wears her gray hair piled high on her head. Today she's wearing a tie-dye dress. "We broke up three times but then got married," she goes on. "My parents were not pleased when I kept going back to him. Not at all. But there's something about a guy with a deep radio voice and musical knowledge."

From outside, 3WK Underground Radio looks more like a storage garage than a global rock & roll church. But inside this unassuming bunker around the corner from Hanneke Hardware is a radio station that generates two streams of continuous music: one formatted for indie rockers, the other for aging longhairs. Each month 300,000 listeners across the globe tune in.

"When I started in the radio business, the announcers still talked about the music," says Jim, who landed at MOR station KADI-FM (now-defunct) in St. Louis back in 1977 before becoming music director of KWK-FM, then embroiled in a heated ratings war with perennial powerhouse KSHE 95. Atkinson gigged at KSHE for six months, as well. "We'd announce where the artist was from, that it's their third album, and so on."

But as the industry consolidated, demographers dictated strict formats, and playlists created at corporate headquarters replaced hand-selected songs from disc jockeys. So Atkinson left the business in 1993.

Like many radio men, he couldn't stay away. After a few years publishing an industry newsletter, he and Wanda began looking to buy their own FM station. The costs, they found, were steep, and corporate conglomeration had sapped the medium's creativity.

"The best we could have done is maybe a station in Saginaw, Michigan," says Atkinson. "And then I realized: Well, I'm not going to be able to play music that I want to play, anyway. There's no way as a mom-and-pop business you could ever compete.

"So then we decided: Well, why don't we do it on the Internet?"

In December 1997 the Atkinsons debuted their station out of their bungalow in the South Hampton neighborhood, its name a play on the World Wide Web and WWWK, the official call letters of dear departed KWK-FM. (They even secured WWWK's old request-line phone number.) Since then, the couple has helped pioneer Internet radio. In boom times they watched as billions of dollars in venture capital swarmed around them. They helped set the standard for streaming technology, listened as their initial offering — a tinny, AM-quality feed — grew stronger and cleaner. They witnessed the Internet bubble fill with hot air, saw it burst and mopped up after it.

Last year, for the first time, 3WK turned a (modest) profit.

But now a new financial threat looms.

Like AM and FM radio stations, digital broadcasters must pay songwriting royalties, which typically amount to 5 percent of gross revenue. For the past four years, one of the fattest line items in the Atkinsons' budget has consisted of additional royalty payments earmarked for record labels and the artists who perform the songs played on 3WK.

3WK's government-mandated rate for these so-called performance royalties: 10 percent of gross revenue.

Congressional legislation that set the performance-royalty rate expired last year. A three-judge panel appointed by the Library of Congress is expected to set a new rate by next March.

The Atkinsons fear the worst.

"As it is now, we can barely afford to pay it," Wanda says. "It's too much. We're the ones playing the music, supporting the artists, helping them sell CDs by getting people to know about the artists. Realistically we shouldn't be paying anything, because we're giving them free promotions. But that's not the way it has worked out."

Next Page »