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| Will Royalty Hikes Signal The End Of Indie Webcasting? |
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 A recent decision by United States Copyright Royalty Board (CRB) has set a high bar for independent webcasters who want to stream digital audio for little or no profit. The decision will hike royalty rates for non-interactive webcasting an average of nearly 25 percent annually between 2006 (retroactively) and 2010, effectively quashing small or non-profit webcasters and clearing the way for internet media consolidation for those who can afford it.
Click "read more" below.
above photo: from Live 365's "Save Inernet Radio" Campaign
In recent years, webcasters paid a percentage of their revenues based on audience reach to Sound Exchange, the royalty collection arm of the Recording Industry Association of America (RIAA). But the new system, based on the CRB's decision, charges a flat rate per song performance, per listener.
For 2006, that fee will be $.0008 charged retroactively. But by 2010 it will more than double at $.0019. In addition, webcasters will be charged a $500 licensing fee 'per channel.' It doesn't sound like much, but for public radio streams and websites like Pandora that allow users to create their own 'channels', the costs could be prohibitive.
But victims of the CRB's recent decision aren't going to take it lying down.
Leading the fight against the rate hike is National Public Radio, whose 24 hour simulcasts will cost the network millions in additional fees. NPR is filing a motion for reconsideration with the CRB panel this week, arguing that it shouldn't be treated the same as commercial broadcasters who primarily rely on adjustments in advertising fees to meet new expenses.
'This is a stunning, damaging decision for public radio and its commitment to music discovery and education,' NPR Vice President of Communications, Andi Sporkin said in a statement issued March 9th, 2007. 'On behalf of the public radio system, NPR will pursue all possible action to reverse this decision, which threatens to severely reduce local stations’ public service and limit the reach of the entire music community.' .
In it's own statement, Sound Exchange called the board's decision 'fair and reasonable', reminding the public that artists have a right to be fairly compensated from 'webcasters who benefit 'financially or otherwise' from their work.
'Without these royalty payments,' the statement read, 'these artists would, in many cases, be unable to continue contributing to the music world.'
But many independent artists and labels strongly disagree with that position, arguing that they rely on that multitude of webcasters to reach their target audience and the prohibitive royalty hikes threaten their very existence.
However, only those directly involved in the case (Yahoo, AOL, Live365 and a few smaller webcasters including Radioio, Ultimate80s and Accuradio) will be able to file an appeal to the CRB.
Live 365, who expects to pay at least an additional $5 million in new fees under the ruling, plans to lauch a campaign on Capitol Hill to raise congressional awareness.
They want the $500 per channel minimum license fee removed, a reinstatement of the Small Webcaster Settlement Act, the removal of ex post facto charges for 2006, and to create a pay structure more in line with traditional and satellite radio.
Webcasters are encouraging their listeners to contact their congressmen about these issues.
-Mitch Phillips
Sources:
UNITED STATES COPYRIGHT ROYALTY JUDGEMENT In the Matter of DIGITAL PERFORMANCE RIGHTS (Docket No. 2005-1 CRB DTRA)
Wired.com - "Royalty Hike Panics Webcasters -Mar, 06, 2007
Radio And Internet Newsletter (RAIN) - "Webcast Royalty Rate Decision Announced"
ChicagoTribune.com - Hypertext - "NPR may lead fight against Internet radio royalty rate hike"
SoundExchange.com - Statement Regarding CRB Decision - March 9, 2007 (PDF)
RIAA.com - Frequently Asked Questions - Webcasting
Live 365 - Save Internet Radio: New Royalty Rates Threaten Small & Large Webcasters
Read "Net Radio Never More?" and "Why you should support the The Webcaster Alliance" right here on Michiganbands.com
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