Feeds

Internet radio stations rebuff pigopolists' 'compromise'

The future of online radio in jeopardy

Choosing a cloud hosting partner with confidence

Internet radio stations have rejected a compromise proposal from the US music industry on higher music licence payments. It would allow small stations to keep the old fee structure, but stations claim the deal is designed to stunt net radio's growth.

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.

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

Choosing a cloud hosting partner with confidence

More from The Register

next story
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
Spies, avert eyes! Tim Berners-Lee demands a UK digital bill of rights
Lobbies tetchy MPs 'to end indiscriminate online surveillance'
How the FLAC do I tell MP3s from lossless audio?
Can you hear the difference? Can anyone?
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
EU to accuse Ireland of giving Apple an overly peachy tax deal – report
Probe expected to say single-digit rate was unlawful
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
prev story

Whitepapers

A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.