Webcasting, also known as Netcasting, allows you to send audio and video over the World Wide Web. Webcasting utilizes two key technologies: data compression and streaming.
Webcasters use a variety of media formats. Popular audio formats include M3U (streaming MP3), QuickTime, RealAudio, and Windows Media. In order to receive a Webcast, each audience member must have a media player installed on his or her computer, and that player must be compatible with the format of the Webcast. In this article, I will examine each of those media formats and discuss how to work with them after I cover a few basics. (Additional information about many of the products and services mentioned in this article is available online; see the sidebar, “Online Resources.”)SIGNIFICANT BIT
Prior to the advent of streaming, audio or video files had to be downloaded in their entirety to the end user's computer before the files could be played. Such an arrangement works — indeed most file-sharing networks continue to rely on downloading — but it means you always have to wait.
Streaming provides near-instant gratification. Rather than downloading a complete file, the user receives the audio or video as a bitstream. The bits are played in the order they are received, and then they are discarded. Streaming puts the content in front of the end user much faster than downloading, and it doesn't consume a lot of disk space on the user's computer. Streaming also provides the content owner with an additional level of security because disk files are not created on the recipient's computer: data is simply buffered until it's played and is then thrown away.
Audio and video files can be huge. One minute of CD-quality audio uses about 10 MB of disk space. To distribute such large files over the Internet, the purveyors of streaming technologies utilize data compression.
Unlike the kind of compression used to reduce the dynamic range of an audio signal, data compression reduces the size of a file so that it can be transmitted over the Internet more efficiently. There are two stages to data compression: encoding and decoding.
The encoding stage requires software called an encoder. The encoding algorithm analyzes the original file, determines which portions can be omitted or represented with fewer bits, and then creates a new, smaller version of the file.
Unlike CD audio or WAV files, encoded audio and video files cannot be played back in their raw form. They must be decoded using a software application called a player. Some popular players are QuickTime, RealPlayer, and Windows Media Player.STREAMING BASICS
Now that you understand the fundamental technologies of compression and streaming and are familiar with the roles of the encoder and the player, here's a look at a few of the concepts peculiar to streaming and Webcasting.Client/server
A server is any computer that hosts files on a network and makes them available to other computers. There are special software packages, also called servers, that facilitate file serving, but in general use, the term server refers to the host computer and its file serving software as a whole.
The client is the other end of the equation. A client is a computer that receives files from a server across a network. The term client can also refer to the software that the recipient computer uses to play or access files.Bit rate
The sound and picture quality of a compressed media file or stream is measured in terms of bit rate, which is expressed as a numeric value in kilobits — or thousands of bits — per second (kbps). Bit rate is a throughput measurement: it tells you how much data must be shoved across the Internet or pushed through a player in order for the content to be heard or seen in an uninterrupted fashion. Bit rate is the single most important setting in any encoder software because it determines the playback quality, the size of the output file, and the transmission requirements.
Bit rate also happens to be the way that modem speed is expressed. Because most 56 kbps modems rarely connect at speeds faster than 33 kbps, a lot of streaming media is available at 28 or 32 kbps bit rates.
Bit rate also gives you an indication of the amount of compression that has been performed on a file and a general sense of the resulting sound or picture quality. For example, 128 kbps has become a de facto standard for encoding stereo music files into the MP3 format. At the rate of 128 kbps, the compressed audio file is about 1/10 the size of the original uncompressed file; it sounds pretty good and is roughly equivalent to the sound quality of FM radio. At 64 kbps, an MP3 is about 1/20 the size of the original CD track, with sound quality roughly comparable to AM radio. At 32 kbps, an MP3 file is around 1/40 the size of the original and noticeable distortion or aliasing can be heard.Unicast
Unicasting means sending one stream, point to point, from a server to another computer. The computer receiving the stream may be viewing or listening to the Webcast. Alternately, the receiving computer may be relaying the Webcast to other computers (see reflector). Unicasting is simple and may be all that is required if you do not anticipate a large number of concurrent visitors.Multicast
As the name implies, multicasting means sending out multiple copies of a stream to many people at once. A multicast server (sometimes called a reflector) hands a copy of the stream to each client that requests it. Multicasting uses special server software that is equipped for the task and requires significant upload bandwidth for it to handle multiple concurrent users. Most multicasting utilizes Content Distribution Networks (CDNs), although peer-to-peer multicasting schemes are starting to come to the fore. I will go deeper into those subjects in a moment.Reflector
Reflectors are simply servers, typically located within a CDN, that facilitate multicasting. The content originator sends a single stream — a unicast — to the reflector, which, in turn, relays the stream to multiple end user recipients to create a multicast.URL
The Uniform Resource Locator, or URL, is the familiar Internet address scheme (for example, http://www.whatever.com/stream.asx). In the world of streaming and Webcasting, each stream is located at a unique URL. A Webcaster gives the URL to people who might wish to receive the Webcast and places links to this URL on Web sites. For unicasting purposes, the stream URL could simply be the location of the original media file on your Web server. In multicasting, the URL is typically an address at a reflector to which the source stream is directed and from which the end user receives the relayed stream.Archive
In streaming terminology, the term archive refers to audio or video that exists as a disk file on a server, for the purposes of on-demand or time-delayed delivery. This is the opposite of a broadcast, which exists only as a bit stream that is played through a server and is not saved as a disk file.On demand
In an on-demand situation, the stream is played whenever the end user requests it. Most streaming and Webcasting occurs on demand: the archive media files are always available and can be played from the start of the file at any time. Many EM readers have Web pages at MP3.com; the type of streaming done there is on demand.Live event
For a live event, the stream begins and ends at predefined times, and audience members must click in to the stream during the scheduled Webcast in order to receive it. People who arrive late miss the start of the show and join the Webcast already in progress. Many radio stations retransmit their programming as live events over the Internet.Simulated live
A simulated live event is one that has been prerecorded (and presumably edited) and is Webcast subsequently at a specific time that the Webcaster determines. As with live events, audience members must click in during the scheduled cast or they will miss the show.Metafile
Metafiles are files about files: they point to other media files on the Internet. On-demand streaming relies heavily on metafiles. An M3U is an example of a metafile: it is a text file that contains a URL that is the location of an MP3 file. ASX and RAM (for Windows Media and RealAudio, respectively) are other common metafile types. I will explain metafiles in greater depth later.Metadata
Metadata is data about data; it describes or annotates the content of a media file. ID3 tags are a familiar example of metadata. These text fields are included in the file header portion of an MP3 file and provide a convenient way to attach the author's name, song title, album title, musical genre, and other information to the media file. Most media players will display the contents of metadata fields.USING STREAMING FORMATS
When approaching a Webcasting project, one of the first hurdles is deciding which media format to use. There is no universal format. However, during the past six years, the field has boiled down to a handful of popular choices. Because this is Electronic Musician magazine, I will focus primarily on audio, rather than video, streaming.RealAudio
Arguably the most widely installed media player, RealNetworks' RealPlayer and its proprietary RealAudio format have the distinction of being the first participants in the streaming-media space. The sound quality associated with RealAudio has steadily improved over the years. RealPlayer comes preinstalled on many computers, and the Mac and Windows versions can be downloaded for free.
Webcasting in RealAudio requires a RealProducer encoder (also referred to as RealSystem Producer). RealProducer Basic (see Fig. 1) is distributed free of charge. The professional edition, RealProducer Plus, currently costs $199. These encoders compress audio files into the RealMedia (RM) format and simultaneously create a metafile, called a RAM file, that references the location of the RM file.
For multicasting applications, RealNetworks has RealSystem Server and a proprietary technology called SureStream. SureStream-encoded files contain several copies of the audio at different bit rates. RealSystem Server identifies each listener's connection speed and transmits at the appropriate bit rate. The selection is made automatically so that listeners receive the best-quality transmission possible at their current connection speed.
RealSystem Server Basic supports as many as 25 simultaneous listeners and is available free for a one-year trial period. RealSystem Server Plus, which handles 60 concurrent users, sells for $1,995. If money is no object, you can get the Professional edition of RealSystem Server: for as many as 100 simultaneous users, it costs $5,995; for 400 simultaneous users, the fee is $21,000.
All RealSystem Server packages require Windows 2000 or NT4, Linux, or FreeBSD; there is no Mac equivalent. RealSystem Server can be run on a computer at your Internet service provider's (ISP's) hosting facility. RealNetworks offers its own hosting and distribution service, which is priced and packaged for high-end corporate users (as opposed to cash-strapped musicians).Windows Media
When RealAudio and MP3 became hot, Microsoft decided that it needed to come up with a competing technology. Windows Media is a good-sounding format; its quality is roughly equivalent to RealAudio's and noticeably better than MP3's at comparable bit rates. Windows Media Player is bundled with Microsoft's Internet Explorer Web browser, much to the consternation of certain well-known competitors and ambitious antitrust attorneys.
Windows Media Player is fairly ubiquitous on the PC platform but is not widely installed on Macs, in part because of general cultural bias. Both versions are distributed free of charge.
You must have Windows Media Encoder (WME) to create content in the Windows Media format (see Fig. 2). The application is distributed free of charge but runs only on the Windows platform; no Mac version is offered. Moreover, WME seems to run best under Windows 2000. There are ongoing problems and some well-documented crashes that occur under Windows ME, and in my opinion, Windows XP is too new and untested to be relied upon at this time.
WME accepts an input source, typically a WAV file, and compresses the audio into a WMA file. (It will also convert MP3 files into WMA, but please resist the temptation: you don't want to compress a file that has already been compressed, for reasons of sound quality.)
To stream a WMA file, you need to create a metafile called an ASX. An ASX file is simply a text file that points to the location of a WMA file. To make an ASX, open a word-processing program such as Notepad and create a new document. This document will reference the location of the WMA file and should look something like this:
The parts of that example in bold text must appear as shown for your ASX to work. Obviously, the URL will vary in every case because it must point to the unique location of your WMA file. Save this new text file with a name that ends in the file extension .asx (for example, songtitle.asx).
One of the most interesting things about Windows Media and ASX streaming is its support for URL scripts. Adding a URL to the file metadata during the encoding process allows you to create audio files and streams that open other Web pages. That lets you show lyrics, photos, band information, and even advertisements to the end user every time the audio is played. When the URL script is executed, a new Web browser window pops up and the specified Web page is displayed. This technique is not well documented and is somewhat involved. My “Desktop Musician” column on WME, in the February 2002 issue (available at www.emusician.com), offers complete step-by-step instructions on URL scripting.MP3
The closest thing to a universal file format for music on the Internet is MPEG1, Audio Layer 3, better known as MP3. MP3 constitutes the audio portion of a much larger digital-video specification that was established many years ago by the Moving Picture Experts Group. A number of MP3 players are available for the Macintosh and Windows platforms, many of them for free. Nullsoft Winamp (see Fig. 3), a product of AOL, is the most popular MP3 player for Windows PCs and is bundled with AOL's Netscape Navigator Web browser. Apple Computer's iTunes is the happening Mac player and successor to the venerable SoundJam MP.
As with all other compressed audio formats, encoding software is required to make MP3 files. Sometimes called rippers (as in rip-off), a variety of encoders are available for Mac and PC. Because of the restrictions that surround the licensing of MP3 encoding, most encoders cost money (after their trial periods time out). An exception is iTunes; Apple paid a hefty license fee and can give away its encoder for free.
MusicMatch Jukebox is a well-known encoder for the Windows platform. However, it times out and demands payment after 20 rips. Drop by the software section at MP3.com for a comprehensive selection of encoders and players.
When encoding audio into the MP3 format, don't overlook the ID3 tags. Those metadata fields allow you to include basic information such as artist name, album title, musical genre, and even track notes and Web site URLs. Most MP3 encoders support some form of ID3 tags, and nearly all MP3 players will display their contents.
To stream an MP3 file, you must create a metafile called an M3U. An abbreviation of MP3 URL, the M3U is simply a text file that contains the Internet address of an MP3 file. Open any word processor and create a new text document. The document must contain the complete URL of the file that is to be streamed and will look like this:
That's all there is to it! An M3U file can be much simpler than an ASX file; it need only contain the MP3 URL. As with an ASX file, the URL of an MP3 will vary in every case because it refers to the unique location of your MP3 file. Save this text file with a name that ends in the extension .m3u (for example, songtitle.m3u). Additional commands (called tags) can be incorporated into an M3U or ASX file to modify its behavior. Use your text editor to open up metafiles you encounter on the Internet and take a peek at what other Web designers are doing.
Because most Internet music listeners have one or more MP3 players, M3U is a good format for on-demand streaming. Unfortunately, most MP3 encoding software is not designed for live Webcasting (unlike WME and RealProducer). You can find hardware solutions that perform on-the-fly MP3 encoding, such as the Audioactive MPEG Real Time Encoder. At a suggested retail price of $2,800, that product is clearly geared toward professional markets. There is, however, a dirt-cheap solution for live MP3 streaming: Shoutcast (more on that in a moment).QuickTime
Developed by Apple Computer back in 1991, QuickTime was one of the first widespread digital-video technologies. Strictly speaking, QuickTime is not a format unto itself, but a wrapper or platform that can contain any of dozens of different audio, video, and graphics file types, including MPEG video or MP3 audio. QuickTime Player (see Fig. 4) is given away free of charge and is bundled with all new Macintosh computers and some Windows PCs. As one would expect, QuickTime Player is pervasive on the Mac platform but not quite as popular with Windows users.
If you want to author QuickTime media, you need to purchase QuickTime Pro, which sells for $29.95 and runs on Mac and PC. Unlike WMA, RealAudio, and MP3 streaming, QuickTime does not require the creation of a metafile. Instead, QuickTime begins playing any supported file type as it is downloading, even if the file is a garden-variety MP3.
For live-event streaming with QuickTime, you must have third-party live-streaming software, such as Sorenson Broadcaster (Mac, $199; Windows, $249). In order to multicast using QuickTime, you need to set up a Macintosh G3 or G4 computer as a reflector and run QuickTime Streaming Server, an application that comes bundled with Mac OS X Server. Alternately, an open-source version, called Darwin Streaming Server, is available for Windows, Solaris, Linux, and FreeBSD. QuickTime Streaming Server and Darwin Streaming Server are distributed for free.ON-DEMAND STREAMING
The most primitive form of Webcasting would be to offer on-demand streams of individual songs or videos that can be unicast from a Web server. That kind of setup assumes that you already have a Web site and that that site is hosted on a Web server, either at a colocation facility or on a computer that's under your own control. Moreover, it assumes that you will be experiencing fairly low traffic levels — no more than one or two concurrent users at any time.
To make that work, simply upload the audio files and their associated metafiles to the Web server. Then, create a Web page that includes links to the metafiles and upload that to the server as well. If the metafiles contain the correct Internet addresses of the audio files, everything should run smoothly. Users clicking on the links will hear the media files begin streaming almost immediately.
If you're going to have only one or two concurrent users at a time, that type of setup should work fine and can be hosted at any inexpensive ISP's Web hosting facility. The downside is that this type of arrangement cannot scale to handle large audiences: if you get more than a handful of simultaneous listeners, the performance will begin to seriously degrade.TURNKEY WEBCASTING
The simplest way to get your own Webcast online is to use one of the turnkey Internet radio services. Live365.com is the best-known and most user-friendly offering in that class. Broadcasters pay a small initial setup fee as well as a nominal monthly charge to maintain their shows. Then they can upload MP3 files and a Playlist, which specifies the order in which the songs are to be played, to Live365's server.
Live365 handles media storage as well as streaming and adds a link to your show in its program guide. Live365 offers a software application that automates the process to some degree. At the end of the process, you'll have a simulated live event that loops continuously; listeners who click in to your Webcast will join it in progress. (For more details on how to Webcast using Live365, read Ron Simpson's article “World Wide Wadio” in the 2002 issue of EM's Desktop Music Production Guide.)
A slightly more involved, but absolutely free, route is offered by Shoutcast, an MP3 Webcasting technology developed by the Nullsoft Winamp team. With Shoutcast, you simply drag audio files into a Winamp playlist or select sound-card input for live broadcasting, and then blast the program out to the world.
There are three primary components to a Shoutcast setup: the Winamp player software, the Shoutcast Source DSP plug-in, and the Shoutcast Server software. Download and install all three software elements. You can run the broadcasting software and the server on the same computer.
Once installed, launch Winamp and type Control + K to open the Preferences dialog; click on DSP/Effect in the left-hand panel; then, double-click on Nullsoft SHOUTcast Source DSP in the right-hand panel to open the configuration dialog. Select the Bit Rate for your stream in the Encoder tab. Choose Winamp Playlist or Sound Card Microphone Source in the Input tab. Most importantly, go to the Output tab (see Fig. 5) and click on the Yellow-pages button to reveal the Description, URL, and Genre fields, where you will name and categorize your broadcast. Assuming you leave Make This Server Public checked on, your broadcast will be added to the Shoutcast program guide, where members of the general public can easily find you. Finally, launch the Shoutcast server software and click on the Winamp Play button.
Shoutcast Server basically configures itself and adds new broadcasts to the Shoutcast online directory automatically. With no prior Shoutcast experience, I was able to download, install, configure, and commence broadcasting in a mere ten minutes, just using the default Shoutcast DSP and Server settings. Any MP3 player can listen to Shoutcast streams, but a Windows PC with a high-speed connection, such as DSL or a T1 line, is required for Shoutcast broadcasting.LIVE WEBCASTING
For real Webcasting excitement, try presenting a live event. With the proper gear and preparation, any live gig or studio performance can be encoded on the fly and broadcast to fans around the world.
First, you need a computer at the performance site running an encoder. Shoutcast is a viable option, though professionals tend to gravitate to RealProducer or WME. Next, you need a high-speed Internet connection such as DSL or a T1 line. The encoder will stream the broadcast audio to a Web server or reflector for relay to your listening audience.
To configure the encoder for broadcasting, you need to know the name or IP address of the destination server, the server port from which the stream will be transmitted (a four-digit number), and the file name users will hit to hear the stream. RealProducer and WME offer the option of archiving the broadcast to a disk file for later use.
In order for people to find and hear your Webcast, you can add links on your Web site to the broadcast file name on the Web server or reflector. You can also send the URL to your fans as a link in an e-mail message. Finally, patch the mixing board output to the sound-card input on the encoding computer, start the encoder software, and commence with the Webcast.
As with radio or TV live broadcasts, lots of potential problems can crop up. I've seen audio cables fail because they were stepped on, sound cards become unplugged or unseated, encoding software freeze and crash, typographical errors in links, inexplicable reflector failures, deliberate screwups by ISP employees, crummy audio mixes by negligent student interns, and unforeseeable bottlenecks on the Internet.
All of this potential for disaster makes live Webcasting exciting, sometimes to the point of being terrifying. Make sure to keep an archive program from a previous broadcast, or some long musical selections, stored on the encoding computer's hard disk, in case of a control-room hardware or wiring failure. You can quickly switch the encoder source to the backup audio and keep your listeners engaged while you locate and correct the point of failure.
Before you attempt any live Webcast, you should thoroughly test each part of the signal chain. Give yourself ample time for correcting any technical difficulties. It's also a good idea to communicate your Webcasting intentions to everybody downstream: let your ISP or CDN know about your live events well in advance of the actual Webcasts. Otherwise, they might do something like bring down your server for routine maintenance right in the middle of your broadcast.CDNS
Running your own multicast server or reflector is generally beyond the scope of what most individuals and businesses are willing or able to do. With the increasing popularity of streaming media, a new business category has arisen: the CDN.
CDNs are in the business of getting content from its creator to the end user quickly and efficiently. CDN topologies vary; typically, they store data (such as Web pages, download files, or streams) in multiple places, usually making use of server farms or caches located near large ISPs or Internet backbones. In all cases, a CDN will assign you a URL that the public can link to, take a unicast from your encoder, and then multicast the stream to the listening audience. The URL may link to a single computer in one data center, or it may route traffic to any number of servers located at various points across the Internet.
Like many sectors of the Internet, the stream delivery business was overbuilt in the late 1990s and has been going through a shake-out and consolidation of late. One of the most prominent stream relayers, Intel's Internet Media Services (IMS), shut down entirely after investing an estimated $200 million in its network. Another big player, iBeam Broadcasting, was recently purchased by Williams Communications after declaring bankruptcy.
Well-known CDNs that serve the high-end streaming media business and that are still alive at the time of this writing include Digital Island, RealNetworks, and sector leader Akamai. Additionally, there are smaller CDNs dedicated to medium- and low-volume multicasting. The Stream Guys is just one of many providers in the down-market end of this sector, providing stream deployment for as little as $1 per concurrent stream per month. If you need the capacity to have 100 simultaneous users, it would cost you $100 per month at the Stream Guys.PEER-TO-PEER WEBCASTING
Along with the general dot-com shake-out, brutal price competition, and the worldwide downturn in advertising revenue, another factor hammering the CDN business model is the ascendance of peer-to-peer or distributed networks. Taking a page from the Napster play-book, peer networks rely on the bandwidth and computing resources of individual network users to distribute content. Instead of running massive server infrastructures that handle all user traffic, the peer network directs new users to other users that are already hosting a particular piece of content. Kontiki, a startup founded by some Netscape veterans, is a prominent participant in the enterprise side of this sector.
Of particular interest to musicians is AllCast, a New York-based startup that holds a core patent in peer-to-peer stream distribution. AllCast's technology, which is currently in a free beta release, allows any Windows PC with Windows Media Player to become a broadcast encoder. The AllCast Broadcaster software (see Fig. 6) allows users to select a Windows Media Player playlist, the computer's CD player, or the sound card's microphone input as the signal source.
AllCast Broadcaster encodes audio into the Windows Media format on the fly and adds the broadcast to the AllCast program guide. Users who wish to listen to an AllCast stream download a small plug-in and are directed to other users who are already receiving the stream. Users tend to come and go on peer networks, and the AllCast server handles that quite well by redirecting users to new sources with little or no interruption.
Because they make use of the bandwidth and resources of the network users, peer networks (in theory) don't require the expensive infrastructure that traditional client/server CDNs rely upon. As a result, they hold the promise of being far less expensive, particularly for small-audience Webcasting, than solutions such as Akamai's or even the Stream Guys'. Indeed, AllCast's solution is entirely free at the time of this writing, though it has indicated that it intends to charge for the production release when it becomes available.
Unfortunately, peer streaming is in its infancy. The technology is explicitly in beta (which means that bugs are known to exist), and the sound quality needs some work before it can be truly competitive with traditional CDN service.DMCA COMPLIANCE
The Digital Millennium Copyright Act (DMCA) and the Digital Performance Right in Sound Recordings Act (DPRA) were passed by Congress in the late 1990s. Those laws place certain restrictions on Webcasters that affect what, and how, they may broadcast over the Internet (for a closer look at the ins and outs of the DMCA, see “Working Musician: Do the Right Thing” in the April 2001 issue).
Most significantly, Webcasters are getting hit with a special license fee in order to “perform” music over the Internet. In addition to paying ASCAP, BMI, and SESAC for the right to broadcast musical compositions (like any radio station or nightclub), Webcasters will also be required to pay a new and unique license fee to the owners of the copyrights on the sound recordings themselves.
Those sound recording fees are administered by an organization called SoundExchange, which, not coincidentally, is a division of the Recording Industry Association of America (RIAA), the record industry's lobbying and litigating trade organization. No longer content with handing out Gold record certifications and suing the Internet music firms, the RIAA has set itself up in the admirable business of collecting and disbursing this new Internet tax.
SoundExchange is establishing a statutory license rate for Webcasting of sound recordings. What the exact rate is, or will be, remains under negotiation at the time of this writing. The Copyright Office is administering arbitration that is expected to conclude by the time you read this.
There is a remote possibility that the statutory license will be thrown out, though that seems unlikely considering the influence wielded by the participants in this arbitration. In the meantime, Webcasters are urged to notify SoundExchange of their intent to comply with the licensing requirements and to send along a good-faith prepayment.
In addition, the ways in which music can be presented in a Webcast are severely restricted by the DMCA and the DPRA. Under the terms of the statutory license, Webcasters can provide only noninteractive programming that is not on demand or personalized. Moreover, Webcasters are not permitted to play more than three songs from any one album during a three-hour period or more than two songs from an album consecutively. Webcasters cannot preannounce upcoming songs or post their playlists in advance. Archive programs may not be less than five hours in duration, and looped programs may not be less than three hours long.WEB OF POSSIBILITIES
Does that sound like a headache for Webcasters? It's meant to be, and that's just the first page of the rule book. Drop by the RIAA Web site and view its Webcasting FAQ for the complete list of regulations. Note that if you're thinking about offering on-demand or interactive music services, the statutory license will not apply: interactive services still need to negotiate separate licenses with each record label or copyright holder.
Naturally, the reason for all this legislation and regulation is that Webcasting is expected to become a big business. It poses a potential threat to portions of the traditional music business, and the major record labels expect to be in control of the game. Upstart Internet music services, from MP3.com and Napster on down to kids Shoutcasting from their dorm rooms, are considered competition for the record labels' own online initiatives. Preemptive hampering or outright elimination of these competitors just makes good business sense.
My recommendation is that if you want to play other people's music, particularly music that is commercially released by major labels, then play by the rules and render unto Caesar. On the other hand, you can easily set up a Webcast that plays only your own music or secure agreements from your friends in unsigned or independent bands that will let you play their music with little or no restriction. Providing airtime to artists that do not (or cannot) get mainstream commercial exposure is where Webcasting's real value is realized.