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Internet Radio Stations React To New Royalty Scheme
New RIAA plan consumes most station's entire revenue stream...
by Karl Bode 06:17PM Monday Mar 05 2007 Tipped by johnt82 See Profile
The longstanding debate between webcasters and the RIAA really hasn't been a hot topic since 2002-2003, when the RIAA pushed hard for some significant royalties that threatened to put smaller operations out of business. Smaller outfits were able to negotiate a revenue percentage deal that kept them operational, but those deals have now expired, and the RIAA has been hard at work trying to get their original fee structure imposed.

As mentioned over the weekend, a controversial decision by the United States Copyright Royalty Board on Friday reheated the feud. The board rejected a myriad of proposals and arguments by webcasters, essentially rubber stamping a proposal by the RIAA's SoundExchange royalty organization. The RIAA's proposal imposes per play charges on webcasters retroactively to 2006, while increasing yearly. It breaks down as follows:
2006: $0.0008 per stream per user
2007: $.0011
2008: $.0014
2009: $.0018
2010: $.0019
So what's the problem? According to the Radio and Internet Newsletter (RAIN), a typical Internet radio station plays about 16 songs an hour, meaning they now have a retroactive 2006 royalty obligation of roughly 1.28 cents per listener-hour. The group says total revenues per listener-hour for that typical webcaster would only be in the 1.0 to 1.2 cents per listener-hour range. That's before composer royalties.

Many Internet stations simply can no longer afford to exist, since royalty obligations will exceed total revenues -- leaving many stations wondering what happens next. RAIN cites the popular Pandora project as one example -- their owed royalties could easily exceed all of their recently acquired rounds of venture capital and all their sales revenues to date. Radio Paradise's Bill Goldsmith runs a small broadcast operation and voices his opinion over at his blog.

"I have watched the medium that I love turn from an essential part of the process of connecting those who love making music with those whose lives are touched by it into a mindless background hum of advertising and disposable musical sludge," he writes. "[The new rates are] a death sentence for all US-based independent webcasters like Radio Paradise, SOMA-FM, Digitally Imported, and many others."

"We’ve done everything right, we’ve paid all of our fees, and they are still coming at us like we’re pirates," says Ram Radio's Pam McClusky to BlogCritics. "As it stands right now, this effectively takes Ram Radio off the air."

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This is collusion and it's illegal.

Imagine if the airlines openly formed a group to fix airline ticket prices. That's collusion, illegal and the JD of both Fed and States would be all over them like stink on crap in 2 seconds. Imagine if there was proof found that oil companies formed a group to fix gasoline prices. That would be collusion, illegal and in this political climate oil people would be going to jail.

But when the entertainment industry does it, it's okay just as the RIAA racketeers can blackmail people into settlements without penalty.

This is blatant collusion. This is competitors conspiring to fix higher prices for mutual benefit in what amounts to an oligopoly. It's CRIMINAL and the RIAA membership should be fined and the RIAA itself dismantled.
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reply to FFH5

Re: United States Copyright Royalty Board ??

said by FFH5:

A question I have is where were all these music streaming groups with their comments on the hearings that have been ongoing thru 2006? They had their chance to make their case, but they didn't take part. NOW, they are all running around and whining. Where were they for the last year?
what difference does it make whether they made comments and what they were? I doubt that any comments contrary to the recording industries' desires were seriously considered or even considered at all.

This entire government is by the business, for the business and nothing but the business. Consumers and other "little people" aren't part of the equation.

Your tax dollars at work.
Tallahassee, FL

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reply to daslog

Re: So what's the problem?

said by daslog:

They own the rights to the content, they should be able to charge for it.

Or is this another "we should be able to pirate it becuase it's easy to" post?
If you read about monopolies and how they relate to destroying the theory of capitalism you will see why this should not be allowed.
Adam Smith is a good starting point to start reading.
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United States Copyright Royalty Board ??

For those who have heard of the Copyright Office and the Library of Congress and their parts in copyright management, but have never heard of the United States Copyright Royalty Board, here is a link to their web site:

Here are the 3 guys who make the decisions on royalty rates:
» ··· ges.html

Here is the web page with links to written testimony that led up to this decision:

Participants in the hearings that led to the decision:
» ··· icipants
A question I have is where were all these music streaming groups with their comments on the hearings that have been ongoing thru 2006? They had their chance to make their case, but they didn't take part. NOW, they are all running around and whining. Where were they for the last year?
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