By John Eckberg
The Cincinnati Enquirer

WOXY-FM (97.7) has long promoted itself as "the future of rock and roll."

But the tiny alternative rock radio station with a global reach from its Oxford office is likely to become history.

An experiment to play alternative-rock programming on the Internet has not succeeded, said owners Doug and Linda Balogh, who have set May 13 as a deadline for the station's Web sign-off.

The Baloghs already had sold the station's frequency allocation at 97.7 FM and the new owners have not revealed their programming plans.

But the Baloghs had hoped to continue streaming alternative-rock programming on the Web. And if investors for the Webcast are not found by May 13 - the tab is projected at $639,000 annually for an estimated three years - the station's Internet broadcasts and the WOXY that loyal Internet listeners have come to cherish will be finished, said Doug Balogh.

Webcasting plans hit a snag, Balogh said, because of bandwidth costs associated with Web distribution of programming and royalty payments for playing the music.

Payments must go to artists or copyright owners every time a song is played.

Balogh is not exactly relishing the next two weeks and said that so far 2004 has been emotional - with potential investors found and then lost, sometimes in the same week.

"It's disappointing, that's for sure," said Balogh, 62, of the pending decision to pull the plug. "What we're looking for is a Roy Hobbs to come to bat in the ninth inning. We need a visionary.

"It's the bittersweet end of an adventure of 23 years. If fate doesn't intervene within the next week, well, I can feel a deflation."

The Baloghs sold the terrestrial signal of the station to First Broadcasting Investment Partners of Dallas for $5.6 million earlier this year. The formal sale closing is expected in May, depending upon a Federal Communications Commission timetable.

Alt-rock institution

The Baloghs bought the station in 1981 for $375,000, converted the format to alternative music in 1983 and soon became an international symbol of alt-rock.

It now posts a Web listenership that ranks it 11th on Arbitron's ranking of Internet broadcasters and tops in the commercial alternative radio category.

The loss of WOXY will have a terrible impact on homegrown music lovers and musicians, said Jim Blase, a co-owner of Shake It Records, a Northside music store.

"WOXY championed local bands and independent labels. They broke music worldwide," Blase said. How else would Clifton or Covington bands have gotten airtime in England, Hungary, Scotland, Japan or dozens of other countries?

"You can tell they dig what they play. Their music was not about how much money some corporation had invested in a record. It was not about how much some label guy was shoving down their throat."

Balogh estimated that about one-third of the station's expenses are for broadband and costs related to music royalties that are paid to SoundExchange, a Washington nonprofit trade association controlled by a board of artists and labels.

"We value our relationship with our local community and didn't want to be two days before shutting down and say 'by the way, we've not been successful,' " Balogh said of closure plans.

Prohibitive costs

It was the royalty structure that has unraveled the Web plans - with cost of streaming the music another hurdle.

Those payments go to artists or copyright owners for songs played on the Web, the U.S. Copyright Office determined in 2000, and in the wake of that decision, most radio stations simply stopped streaming music onto the Web.

All that has come unraveled, Balogh said, because of the royalty structure of Web broadcasting, which is the digital transmission of a station's play list or Web-based broadcaster on the Web and accessed through personal computers.

Some 1,000 stations in the United States send their music programming out on the Web, with about 600 of those from non-commercial public-interest radio stations, said John Simson, executive director of SoundExchange.

Royalties paid by Webcasters to SoundExchange range from 10 percent of their first $250,000 in revenue - and 12 percent above $250,000 - to a rate based on an aggregate tuning hour, which is $.0117 per listener per hour; that is, the number of listeners per hour times that rate.

Webcasting royalties for 2003 were $7.5 million, Simson said.

There is no mystery why so few of the 10,000 stations in the United States play music on the Web, insisted Mark O'Brien, executive vice president of BIA Financial Network, a media consulting group located in Chantilly, Va.

"RIAA said to Web broadcasters that you have to pay us and pay us a lot," O'Brien said. "It squashed Web radio."

Simson insists that Web royalties are justified. Intellectual property rights of American musicians have been trampled upon by radio for decades, he said.

"Radio has been unfairly subsidized by American artists for 70 years," he said. "They've been getting the music and haven't had to pay for it. In every other country in the world, artists get paid when their music gets played over the air."

E-mail jeckberg@enquirer.com