On Friday, which is generally accepted in public relations circles as the best day of the week to release controversial news, the United States Copyright Royalty Board (image to the right) announced new royalty rates for webcasts, effective from 2006 to 2010.
The board ignored the arguments of the International Webcasting Association and other webcasters, and apparently simply endorsed the proposal of the RIAA-associated SoundExchange royalty organization, which represents the major and some indie labels.
The new rates force webcasters to pay for each song streamed to each user, and increase over the next few years as follows:
2006: $0.0008 to stream one song to one listener
2007: $.0011
2008: $.0014
2009: $.0018
2010: $.0019
Those fees will add up quickly for larger webcasters; the Radio and Internet Newsletter (RAIN) calculates that, assuming that the average station plays 16 songs per hour, sites would have to pay "about 1.28 cents" per listener per hour using the 2006 rate, and would owe this retroactively, in addition to licensing fees going forward. RAIN's math indicates that the rate would render Internet radio unsustainable, or at the very least, more ad-laden than terrestrial radio -- and that's before the songwriters' licenses are taken into account:
The situation looks grim for webcasters large and small. Even tiny siteswould owe the minimum of $500 per channelper year, which could also have implicationsfor webcasters who provide customized radio stations, since the CRB does not define whether those would each constitute a "channel" (whatever that is). Webcasters have a 15-day period to ask the CRB to rehear arguments.
(image of the Copyright Royalty Board members being sworn in from the Library of Congress)*
