New Royalty Rates Could Kill Internet Radio

FlatCatInASlatVat writes "Kurt Hanson's Radio Internet Newsletter has an analysis of the new royalty rates for Internet Radio announced by the US Copyright Office. The decision is likely to put most internet radio stations out of business by making the cost of broadcasting much higher than revenues. From the article: 'The Copyright Royalty Board is rejecting all of the arguments made by Webcasters and instead adopting the "per play" rate proposal put forth by SoundExchange (a digital music fee collection body created by the RIAA)...[The] math suggests that the royalty rate decision — for the performance alone, not even including composers' royalties! — is in the in the ballpark of 100% or more of total revenues.'"

Re:surprised??? never...

[tepples]

theres another solution, switch servers to one that isn't based in an RIAA controlled country.

Good luck. Almost all countries with high-speed access to the Internet are members of the Berne Convention for the Protection of Literary and Artistic Works.

Re:surprised??? never...

[novus ordo]

http://www.soundexchange.com/licensing101.html#a14 [soundexchange.com]

I already pay royalties to BMI, ASCAP and SESAC. Why do I have to pay royalties to SoundExchange also?

Every musical recording embodies two distinct copyrighted works. The first is the underlying musical composition, comprised of the written notes and lyrics (for purposes of copyright law, the musical composition is referred to as a "musical work"). The songwriter and/or his or her music publisher usually own the copyright in the musical work. The second copyrighted work is the actual recording itself - the sounds, including the recording artist's interpretation of the musical composition, and the creative efforts of the producer, sound engineers and background musicians. (This is referred to in copyright law as a "sound recording.") The copyrighted recording brings to life the written notes and lyrics of the musical work. A record label typically owns the copyright in the sound recording.

SoundExchange collects and distributes royalties associated with the public performance of sound recordings made by services operating under one of the compulsory licenses. By contrast, ASCAP, BMI and SESAC collect and distribute royalties associated with the public performance of musical works.

You can go to each band whose music you want to play and make a deal with them directly. Obviously unless you are only playing a few artists(who would return your call) it would be quite impractical to be calling 100s of artists and flying over to wherever the hell they are(don't forget your lawyer) and make and sign contracts. This is where SoundExchange comes in and 'frees' you of that burden.

Contrary to what GP states, MANY if not MOST of the internet stations out there operate through this statutory license(if they license at all). I do agree though that they should be paying broadcasters like they do with terrestrial radio. But terrestrial radio stations have stringent requirements who plays when and how many times. Basically they run the show.

Re:surprised??? never...

[digitig]

Since when did placing the government in charge of collecting revenue automatically lead to censorship?

The issue is not so much who does the collecting as who does the distributing.

Ok, name one single instance in which the current UK government has attempted to have "evil" music genres banned, or one single instance in which the current UK government has attempted to have music critical of it banned. Or, come to that, one single other act on its part that leads you to believe that giving it the authority to collect revenues from compulsorary licensing would inevitably lead to censorship.

Individual MPs -- and indeed groups of MPs -- in the UK, in the Netherlands and in France, have called for restrictions on Rap. They have not succeeded yet, but it's enough to make me nervous. And the licensing act of 2003 has, as predicted by the Musicians Union, caused the widespread closure of folk clubs and live music sessions (just follow the sad litany of closures on uk.rec.music.folk). A lot of us on the folk scene suspect that the present Labour Party leadership remembers all too well how the folk clubs of the 1960s were a hotbed of left-wing dissent and fears that they could be again. The present UK government do seem determined to stamp out amateur music making; when the 2003 licensing act was being discussed, ministers consistently refused to acknowledge that there was any music making at all outside "the music industry"

Re:surprised??? never...

[rsmith-mac]

I am a shoutcast fiend. I scan the top stations every day or two. Hardly any of the stations (even the popular ones) play RIAA music.

It's not about what music is related to the RIAA, it's about who has to pay SoundExchange either way. Looking the top-20 station list on Shoutcast right now, these are the stations that either do or should be paying fees to broadcast in the United States:

• All Sky.Fm & Digitally Imported stations(6)
• .977 The Hitz Channel(RIAA music)
• HOT 108 JAMZ(RIAA music)
• Radio Paradise(RIAA music)
• 181.fm - Kickin' Country(RIAA music)
• .977 The 80s Channel(RIAA music)
• SMOOTHJAZZ.COM(RIAA music)
• HitzRadio.com(RIAA music)

That's 13 out of 20, and I'm fairly sure other stations should be on that list too. The electronic music stations on that list all likely owe royalties(DI.fm did long before they launched Sky), and I can't tell what stations play a mix of indy(which may or may not be approved) and RIAA music, causing me to miss counting them. It's sufficient to say that the vast majority of popular internet radio stations are required to pay the SoundExchange and would be hurt by this pricing change.

Re:surprised??? never...

[multisync]

i love RP and saw the notice on their website yesterday. someone pointed me to it weeks ago and i listen to it *alot* id hate to see them shut down over this :/

Please support them, if you haven't already done so. If these rates stand, they are retroactive to back to the beginning of 2006. Radio Paradise will receive a bill for last year that is in the six figures.

Re:surprised??? never...

[digitig]

Just so, but worse. The "two in a bar" rule that allowed up to two people to perform was the situation before the 2003 act (which came into force in 2005). Two people, or even one person, singing or playing an instrument without a licence pretty much anywhere is now illegal. There are exceptions for traditional dance and for impromptu performances, so if you turn to your beloved in the park and burst out singing "I will always love you" they won't get you under the licensing act (but then they can get you for disturbing the peace). The upside to the 2003 licensing act is that it's tough on karaoke too, but I think the price is too high just for that

And in reply to the grandparent posting, of course folk clubs come and go for various reasons, but there has been a flurry of clubs closing down for the specific reason of the owner of the venue deciding that the cost or effort of getting a live music license wasn't worth it. This at a time when folk festivals in the UK are booming and folk has a higher exposure on TV and radio than at any time since the end of what historians call the "long 1960s" (ie, since about 1973)