Tuesday, April 17, 2007

Judges Panel Throws Out Request To Reconsider Internet Radio Royalties

April 17, 2007

If you want to be in the radio business, the easiest and quickest platform was internet radio. With the boom of the internet, many internet radio stations came into existence. Now, many may vanish because of new royalties set for internet radio.

Yesterday, a panel of copyright judges threw out a request to reconsider a ruling that has increased the royalty rate for content played on internet radio. The initial royalty ruling, delivered on March 2nd, has been opposed by companies big and small, who see the higher fees as something that could put many of the smaller companies out of business.

In this latest ruling, the Copyright Royalty Board judges went so far as to deny all motions for rehearing. In addition, the panel also declined to postpone a May 15th date for the new royalties will have to be collected.

The only glimmer of good news for internet radio companies came in the way royalties are calculated. For 2006 and 2007 the royalties are based on the number of hours a consumer listens. beginning next year, the structure will be for a per song and per listener system.

For webcasters, they say that the new system makes their business even more difficult. Terrestrial radio does not have to pay such fees, and many web based radio stations feel that they were already placed at a distinct disadvantage because of this. Higher fees exacerbate the issue. The theory behind terrestrial radios free play deal is that the air play helps promote the sale of CD's and downloads. Web radio argues that they also promote sales of CD's and downloads. Terrestrial radios deal in mandated by law at this point, but as this issue continues to be negotiated, we as consumers could well see substantial changes in the future.

4/17/2007 10:24:00 AM

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