News & Reviews
Internet radio could play on with Senators Wyden, Brownback bill
Days after the Copyright Royalty Board (CRB) pushed back the due date
for newly inflated royalty payments to kick in for Internet radio
broadcasters, two U.S. Senators -- Ron Wyden (D-OR) and Sam Brownback
(R-KS) -- proposed legislation to keep Internet radio alive by vacating
the CRB decision that could increase Internet radio sound recording
royalties by 300 percent to 1,200 percent.
"I am alarmed by
the recent Copyright Royalty Board decision and the effect it will have
on Internet radio -- especially small Webcasters with limited revenue
streams. I am hopeful that with this bipartisan legislation Internet
radio will continue to flourish," said Brownback, a member of the
Senate Judiciary Committee, in a press release.
The CRB’s new rates, originally slated to go into effect today (May
15), were pushed back to July 15. The CRB initiative would effectively
shut down hundreds of Websites that broadcast electronic music like
House, Trance and Drum & Bass, most of which are popular but
Imported recently announced that it would shut down its
public (free) streams as soon as the new rates go into effect, unless
the royalty rates are fixed.
According to an Arbitron and Edison Media Research, 52 million people
listened to Internet radio at least once a month in 2006. Bridge
Ratings and Research predicts that number will double within three
years and reach nearly 200 million by 2020.
July 15, when collection begins on the new royalty fees, literally will
be the day the music died. Most Internet radio Webcasters will be
driven out of business because of a massive retroactive royalty rate
that is above total revenues for most in the business. For large
Webcasters, the royalty increase could be between 40 percent and 70
percent of revenues. For small Webcasters the royalty increase could
reach up to 1,200 percent of revenues.
Currently, terrestrial radio stations only pay royalties to
songwriters. Internet radio and satellite radio pay royalties to both
songwriters and record companies/recording artists. However satellite
radio only pays royalties of 7.5 percent of their revenue.
The Internet Radio Equality Act of 2007 corrects the enormous disparity
created by the CRB by putting Internet radio on par with satellite
radio. Additionally, the legislation would create special royalty rules
for the Webcasting arms of non-commercial broadcasters like National
Public Radio and college radio to ensure they are not left out of
reaching new listeners on the Internet.
"Our bill is about standing up for folks ranging from a small Webcaster
in a basement in Corvallis to an innovative startup in Beaverton to a
new band trying to be heard in Portland to a huge music fan in Coos
Bay," Wyden said. "Keeping Internet radio alive is part of a broader
issue that is important to me -- keeping the e-commerce engine running
by preventing discrimination against it."
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