2008 Woodie Awards
Artist royalties killed the Internet radio star
Brandon Williams
Issue date: 3/29/07 Section: Opinion
- Page 1 of 1
Bad news travels fast. For Internet radio users it has not traveled fast enough and many Internet radio stations may cease to exist.
The Copyright Royalty Board (CRB), a part of the U.S. Copyright office that determines royalty rates in a marketplace transaction, recently approved royalty rates that are likely to put most, if not all, Internet radio stations out of business (http://www.save-internet-radio.com/2007/03/02/save-internet-radio/). These rates went into effect March 5.
The new rates are determined by "performances," defined as one song streamed to one user. For every song that one listener hears an Internet radio station is required to pay $0.0011, a price that will increase each year. This may not seem like much but it adds up when multiplied by hundreds of listeners and music played 24 hours a day. A station that plays about 16 songs an hour for 1,000 listeners will pay $422.40 a day, which means the station would pay $154,176 a year. To make matters worse the bill applies retroactively, meaning stations will have to pay for all of 2006 as well. Soma FM (http://somafm.com/), a Web site that runs 11 different channels and paid approximately $22,000 in royalties before this decision, will have to pay over $600,000 for the music they played in 2006.
SoundExchange, an agency of the Recording Industry Association of America (http://www.riaa.com/about/default.asp), proposed the new royalty rates to the CRB. Willem Dicke, the communications director for SoundExchange, said, "Artists have the right to be fairly compensated for the performance of their work by Webcasters who benefit from their talents." (http://www.columbiamissourian.com/news/story.php?ID=24820) in a press release about the decision.
There is no argument that artists deserve payment for their work but why the sudden raise of royalty rates? What could possibly be a fair reason that Soma FM must go from paying $22,000 a year to over $600,000 for 2006 as well as paying an estimated $1 million in 2007 (http://somafm.com/news/)? Even the idea of what counts as a "performance" isn't clear. What if a person turns off the station two seconds into a song? Does the station get charged for it or not?
Listeners, DJs and owners of Internet radio stations are fighting the new royalty rates to keep Internet radio focused on giving choices and serving the listeners as opposed to becoming strictly a business, which is what these rates will lead to. Several Web sites like Save Net Radio (http://www.savenetradio.org/) and Save Internet Radio (http://www.save-internet-radio.com/) have been created to provide up-to-date news on the situation and a massive petition of over 29,000 signatures can be found at http://www.petitiononline.com/mod_perl/signed.cgi?SIR2007r.
People who wish to help fight against these rates can sign the petition and write to your representative, Dave Loebsack, telling him that you don't support the Copyright Royalty Board's decision to increase royalty rates dramatically. With enough support, a compromise might be reached that keeps Internet radio alive and open for all genres of music.
The Copyright Royalty Board (CRB), a part of the U.S. Copyright office that determines royalty rates in a marketplace transaction, recently approved royalty rates that are likely to put most, if not all, Internet radio stations out of business (http://www.save-internet-radio.com/2007/03/02/save-internet-radio/). These rates went into effect March 5.
The new rates are determined by "performances," defined as one song streamed to one user. For every song that one listener hears an Internet radio station is required to pay $0.0011, a price that will increase each year. This may not seem like much but it adds up when multiplied by hundreds of listeners and music played 24 hours a day. A station that plays about 16 songs an hour for 1,000 listeners will pay $422.40 a day, which means the station would pay $154,176 a year. To make matters worse the bill applies retroactively, meaning stations will have to pay for all of 2006 as well. Soma FM (http://somafm.com/), a Web site that runs 11 different channels and paid approximately $22,000 in royalties before this decision, will have to pay over $600,000 for the music they played in 2006.
SoundExchange, an agency of the Recording Industry Association of America (http://www.riaa.com/about/default.asp), proposed the new royalty rates to the CRB. Willem Dicke, the communications director for SoundExchange, said, "Artists have the right to be fairly compensated for the performance of their work by Webcasters who benefit from their talents." (http://www.columbiamissourian.com/news/story.php?ID=24820) in a press release about the decision.
There is no argument that artists deserve payment for their work but why the sudden raise of royalty rates? What could possibly be a fair reason that Soma FM must go from paying $22,000 a year to over $600,000 for 2006 as well as paying an estimated $1 million in 2007 (http://somafm.com/news/)? Even the idea of what counts as a "performance" isn't clear. What if a person turns off the station two seconds into a song? Does the station get charged for it or not?
Listeners, DJs and owners of Internet radio stations are fighting the new royalty rates to keep Internet radio focused on giving choices and serving the listeners as opposed to becoming strictly a business, which is what these rates will lead to. Several Web sites like Save Net Radio (http://www.savenetradio.org/) and Save Internet Radio (http://www.save-internet-radio.com/) have been created to provide up-to-date news on the situation and a massive petition of over 29,000 signatures can be found at http://www.petitiononline.com/mod_perl/signed.cgi?SIR2007r.
People who wish to help fight against these rates can sign the petition and write to your representative, Dave Loebsack, telling him that you don't support the Copyright Royalty Board's decision to increase royalty rates dramatically. With enough support, a compromise might be reached that keeps Internet radio alive and open for all genres of music.
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