Thursday, March 22, 2007

New royalty rates for Internet Radio stations

How many of you listen to radio stations on the Internet or through satellite radios? Many do at work or in the car, but what most people don't know about are the recent proposed changes to how those stations pay royalties for the music they play. On March 2nd, the Copyright Review Board, a branch of the Copyright Office at the Library of Congress, announced new royalty rates, and plans to retroactively enforce them to January 1, 2006.

The heart of the controversy centers around the issue of royalty fees for artists whose music is played on Internet radio stations, both the large corporate sites like Live365 and Yahoo, and the smaller basement broadcasters feeding their internet hobby through playing their favorite music. The Digital Performance Rights in Sound Recordings Act requires Internet, cable and satellite radio stations to submit royalties to record companies in exchange for playing their artists' songs. There are various rate catagories but the highest current rate is 10.9% of the station's annual revenue.

The new rates level a graduated tax ($0.0008 for 2006 to $0.019 by 2010) based on performance numbers rather than by revenue. A performance is defined as one song to one listener. For example, stations usually play 16 songs per hour. For a station with 500 listeners, that is 16 songs x $0.0011 per song (2007 rate) x 500 listeners = $8.80 an hour. Most internet stations broadcast 24 hrs a day so that is $211.20 a day. Take that times 365 days and the yearly fee to run an internet station with 500 listeners would be $77,088.00.

On one hand the Recording Industry Association of America, who proposed the new rates, says they want to make sure artisits get the royalties due them. On the other hand, opposers of the new rates say many stations will be unable to pay these much higher fee and many will go out of business. Feel strongly one way or the other? Let your Senator or Representative know!

For more information on copyright, go to the library's Copyright Subject Guide.

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