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.
"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."
A Forbes article discussing the dire news for fans of Internet radio. Yesterday afternoon saw online broadcasters, everyone from giants like Clear Channel and National Public Radio to small-fry internet concerns, arguing their case before the Copyright Royalty Board (CRB). The CRB's March 2nd decision to increase the fees associated with online music broadcasting will have harsh repercussions for those who engage in the activity, the panel was told.
There was also a previous provision for smaller companies that allowed them to pay less, something the March 2 decision did away with; in the view of the royalty holders, advertising more than pays for these fees, and they're ready for higher payments.
"Under a previous arrangement, which expired at the end of 2005, broadcasters and online companies such as Yahoo Inc. and Time Warner Inc.'s AOL unit could pay royalties based on estimates of how many songs were played over a given period of time, or a 'tuning hour,' as opposed to counting every single song ... [They] also asked the judges to clarify a $500 annual fee per broadcasting channel, saying that with some online companies offering many thousands of listening options, counting each one as a separate channel could lead to huge fees for online broadcasters."
The Copyright Royalty Board formally rejects a request to reconsider its March decision to impose an onerous royalty schedule on Internet radio broadcasters.
"None of the moving parties have [sic] made a sufficient showing of new evidence or clear error or manifest injustice that would warrant rehearing," wrote the CRB in its decision."
The recording industry (RIAA hordes) and its royalty collection organization SoundExchange are jubilant over the ruling, as you can imagine.
"Our artists and labels look forward to working with the Internet radio industry, large and small, commercial and noncommercial, so that together we can ensure it succeeds as a place where great music is available to music lovers of all genres," said SoundExchange head Simson in a statement.
Noble words, but after today's ruling, which will take effect on May 15 unless the US Court of Appeals for the District of Columbia Circuit agrees to hear an appeal, there probably won't be much of an Internet radio industry left for SoundExchange to work with.
PLEASE HELP TO KEEP INTERNET RADIO ALIVE
This decision has the very real potential to force the closure of a wide realm of online webcasting sources that have significantly impacted the growth and development of independent roots music across all genres. To lose this avenue of promotion and support for roots based music could be potentially devastating with respect not only to its financial impact on the industry, but to its cultural survival.
Isn't it past time that we burn the RIAA/MPAA houses down? ISN'T IT?!?!?