Just before the weekend, the U.S. Copyright Royalty Board announced increased royalty rates for webcasters. As Wired News reports, the board endorsed a rate-increase proposal sponsored by SoundExchange, a tax-exempt royalty association associated with the RIAA. Webcasters have 15 days to ask for a new hearing. Wired: “Those fees will add up quickly for larger webcasters; the Radio and Internet Newsletter (RAIN) calculates that, assuming that the average station plays 16 songs per hour, sites would have to pay ‘about 1.28 cents’ per listener per hour using the 2006 rate, and would owe this retroactively, in addition to licensing fees going forward. RAIN’s math indicates that the rate would render Internet radio unsustainable, or at the very least, more ad-laden than terrestrial radio.”
This chorus—“SoundExchange is killing Internet radio”—quickly spread over the Web, where mostly advocates and not straight news sources picked up the story. A blog called Save Internet Radio looks at the ruling, does the math, and says a web radio site with a mere 1,000 listeners will have to cough up more than $150,000 in fees this year. Wired News, the only nonadvocate site at presstime to have posted an article, notes “Even tiny sites would owe the minimum of $500 per channel per year.” There’s no pro-ruling argument on the SoundExchange site. It’s reasonable for music-lovers to wonder whether an RIAA-related organization has the needs of music fans—or even less-than-major rights holders—in mind. Of course rights holders should get paid when their work is used. But the ruling makes it appear that big webcasters and small webcasters are being treated exactly the same, which doesnt reflect reality. The question is whether punitive rates are intended to keep independent webcasters off the Net, so associations like SoundExchange can focus on collecting big fees from the remaining big players. Is this the way consolidation comes to Internet radio?
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—Radio 2.0 Report