Internet Royalty Rate Could Kill Webcasting

On 2 March 2007 the US Copyright Royalty Board (a 3-judge panel) sided with the Recording Industry Association of America (RIAA) and against Web-casters, musicians and consumers with a ruling on the new web-casting royalty rate. The CRB took the highly controversial position of adopting a pay-per-play rate for streaming digital music instead of the current percentage of revenue model. Web-casters report that the fee hike will put them entirely out of business and kill Internet radio since it amounts to more than 100% of their revenues. Here’s the story. A few details:

Royalty Rate Per Performance (streaming 1 song to 1 listener):

  • 2006 $ .0008
  • 2007 $ .0011
  • 2008 $ . 0014
  • 2009 $ . 0018
  • 2010 $ . 0019

The minimum fee is $500 per channel per year, including non-commercial web-casters.

A group of broadcasters (including National Public Radio and Clear Channel) are challenging this decision since it will cripple emerging businesses that deliver music over the Internet.

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