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DFSX in Jeopardy? Royalty Rate Decision (Mar 3, 2007)The Copyright Royalty Board (CRB) has announced its decision on Internet radio royalty rates, rejecting all of the arguments made by Webcasters and instead adopting the "per play" rate proposal put forth by SoundExchange.RAIN has learned the rates that the Board has decided on, effective retroactively through the beginning of 2006. They are as follows:
2006 - $.0008 per play RAIN ANALYSIS: In 2006, a well-run Internet radio station might have been able to sell two radio spots an hour at a $3 net CPM (cost-per-thousand), which would add up to .6 cents per listener-hour. Even adding in ancillary revenues from occasional video gateway ads, banner ads on the website, and so forth, total revenues per listener-hour would only be in the 1.0 to 1.2 cents per listener-hour range. That math suggests that the royalty rate decision -- for the performance alone, not even including composers' royalties! -- is in the in the ballpark of 100% or more of total revenues. (KH) Question: How does this affect small webcasters? Webcasters (such as dfsxradio.com) who stream through services like Live365 may be in jeopardy, as such firms' business models probably never envisioned a royalty rate this high. (Live365's royalty obligation for 2006 is running in the range of $350,000 per month, and that's not even addressing the question of the $500 per station mininum!) Question: Is this the end of Internet radio? Although this is undeniably a huge victory for the legal departments of record labels (or at least for the lawyers at their industry trade association, the RIAA), I doubt that the heads of the record labels and their marketing executives actually want to see Internet radio driven out of business. (This may be a case of "Be careful what you wish for, you may get it.") Read the whole article in Kurt Hanson.com ASCAP Asks For More Royalties From Internet "Performances" Copyright Royalty Board Sends Streaming Rates Into Orbit! Internet radio stations, including online streams offered by terrestrial broadcasters, are going to be paying a heap more of cash to stream tunes now that the Copyright Royalty Board has made its long-awaited decision on rates. After pondering the topic for two years, the Library of Congress’ subgroup on Friday (March 2) issued a 100-page decision that determines the rates paid by commercial webcasters broadcasting over the Internet to artists.
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