The US Copyright Royalties Board (CRB) will implement higher
charges for online radio music licences from 15th July. Net radio
stations say that the increases will put them out of business, with
retrospective charges for 2006 exceeding stations' total
advertising revenue.
A new offer has been made by SoundExchange, a non-profit music
industry body that collects royalties on behalf of labels. It has
said that it would allow 'small' online radio stations to continue
paying the current royalties, but larger stations would have to pay
the new amounts.
Internet radio station representative group SaveNetRadio has
rejected the plan, saying that the plan is designed to stifle the
growth of online radio.
“The proposal made by SoundExchange would throw 'large
webcasters' under the bus and end any 'small' webcaster’s hopes of
one day becoming big,” SaveNetRadio spokesperson Jake Ward
said. “Under Government-set revenue caps, webcasters will
invest less, innovate less and promote less. Under this proposal,
internet radio would become a lousy long-term business, unable to
compete effectively against big broadcast and big satellite radio –
artists, webcasters, and listeners be damned.”
The deal would allow stations to pay 10% of their revenue in
royalties until they earned $250,000. After that they would pay 12%
of revenue, but it is not clear what the upper revenue cap on
'small' stations would be. Beyond that cap, though, stations would
move to a per-song payment of 0.08 cents per song per listener for
2006 and 0.11 cents for 2007, rising to 0.19 cents by 2010.
SaveNetRadio said that this kind of charging would put internet
radio out of business, and is not what was intended by US
lawmakers.
"A standard that would set a royalty rate more than 300% of a
webcaster’s revenue was not what Congress had in mind, and it must
be adjusted if the industry is going to survive," said a
SaveNetRadio statement.
Satellite radio services currently pay just 7.5% of their
revenue in royalties, while traditional broadcast radio does not
pay anything because labels consider airtime to be promotional.
The Internet Radio Equality Act is currently before the US
Congress. This proposed law would set internet radio royalties at
the same 7.5% level as satellite rates until 2010.
