New RIAA Royalty fees for Internet Radio

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.

News source: Broadband Reports

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9 Comments

this is insane... they are going to far :(

it's internet radio for christ sake! ... not a mp3 file.

more reason to hate the RIAA ... either way they aint getting a dime from me.

The RIAA needs shut down, forever. I personally think that the damn artists could run this operation better than these people.

either way they aint getting a dime from me.

If you have ever bought a CD yes they have


This is just going too far!

well your right then... in that case i should have said... "they aint getting a dime from me IN RECENT TIMES" (in the last few years or more) ;)

how is it going to far? ... you actually WANT to support people like the RIAA?

TickleOnTheTum said,
Why don't the Internet Radio Stations (IRS!) only play free to air music? That way they support the musicians by getting their tracks out there and heard, undermine the RIAA's hold, and encourage future musicians to not sign up with labels.

good idea, in theory. in reality, how much can you listen to these guys over and over...?

as for me, i'm completely against stealing...in theory. in reality, the riaa are such scum-suckers that i would feel completely immoral if i actually purchased a cd. (i own hundreds of cd's. i just haven't purchased any for a couple of years, other than the odd used cd here and there).

boycott sony/bmg. boycott universal. boycott emi. hit those ****ers where it hurts.

TickleOnTheTum said,
Why don't the Internet Radio Stations (IRS!) only play free to air music? That way they support the musicians by getting their tracks out there and heard, undermine the RIAA's hold, and encourage future musicians to not sign up with labels.
It's a commonly held belief that this money is the same as that levied on CDs. It's not the same. Essentially, if you broadcast ANYTHING (even if you yourself are the producer and rights holder) you would STILL need to pay the royalties to SoundXchange (with the exception that you would eventually get it back, minus handling, minus breakage, minus mishandling, minus fixage, minus tax, minus expenses, and so on) because this body handles music broadcast licensing, not music production licensing. I know, bizarre indeed.

F@%$ that! I SAY WE BLOW THEM UP!!

Then again, I'm always for blowing stuff up but okay.

(Seriously, terrorists, kill them all. EVERY LAST ONE)!!

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