Do you listen to streaming music via the web? If so, enjoy it now, because as of May 15, web radio as we currently know it will, in all likelihood, cease to exist.
Alarmist? Not really.
The body that controls how royalties are paid to music copyright-holders has recently changed the way in which royalties are calculated for online radio. As a result, online music stations like Pandora, Yahoo Music, Live365, and Launchcast, as well as countless independent netcasters will now have to pay roughly triple what they were paying before. Beginning May 15, net broadcasters will be required to pay $0.0011 per performance per listener—while that might not sound like much, it quickly adds up. To make matters worse, the recalculation is back-dated to the beginning of 2006, so any Internet station with even a modest number of listeners is going to get hit with a whopping bill, in many cases running into the millions of dollars.
If you have any doubts about how serious this is, go to the homepage of virtually any net radio station—kexp.org, woxy.com, kcrw.org, radioparadise.com, etc.—and you’ll find a reference to the Copyright Royalties Board decision. Many of these stations are listener-supported, but even the big operations like Yahoo and Live365 are going to have a very difficult time paying these bills.
As though all that weren’t enough, the rates are scheduled to increase to $0.0019 per performance per listener in 2010.
A couple of interesting sidenotes… These royalties are paid to an RIAA-created group called SoundExchange, which, in theory, then distributes them to artists. However, SoundExchange keeps a significant percentage of the royalties payments for itself, and it is up to the individual artists to get their royalty payments from SoundExchange.
It should also be noted that traditional, over-the-air broadcasters pay no royalties to SoundExchange.
A coalition of Internet broadcasters appealed the Copyright Review Board’s decision regarding these royalties payments. Unfortunately, the appeal was rejected by the CRB last week. At this point, the only real option for getting the decision changed is via legislation—you can visit SaveNetRadio.org to find out what’s happening on this front, as well as what individual net radio listeners, musicians, and broadcasters can do to help in the effort. They even provide a handy form for emailing you Congresspeople.
Short of some sort of legislation being passed, the future of Internet radio is pretty bleak, and it will arrive pretty quickly. Given the huge array of net broadcasters and the incredible variety of new and interesting music they provide, we’re talking about a pretty significant loss here. Should radio on the web go dark, the alternative is the vast, bland, ClearChannel-controlled wasteland of broadcast radio.