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Royalty Fees Forcing Internet Radio Stations to Close Shop
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posted by justfred
on Tuesday July 23, @03:50PM
from the the-unglamorous-side-of-royalty dept.
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Due to a royalty fee system that will take effect in September, more than 200 online radio stations have closed down. Further, Kurt Hanson, editor of the Radio and Internet Newsletter, reports that most of the estimated 10,000 radio Webcasters are expected to follow suit, "with the exception of Yahoo, AOL, Microsoft and other deep-pocketed conglomerates who can afford a loss leader." As Greplaw reported earlier this month, a copyright appeals board recently set a rate of seven-hundredths of a cent per song, per listener. Not surprisingly, the negative effect of the royalty fee on Internet radio stations has sparked a debate between music industry conglomerates and the supporters of small business.
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Payments of the new royalty fee, which apply both to commercial and non-commercial stations, are due Oct. 20 for this year and are retroactive to 1998. Consequently, many non-profits, such as the UCLA and NYU Web stations, have shut down. Additionally, KPIG, the first commercial station to stream its signal over the Internet in 1995, has stopped online broadcasts, along with other popular sites, such as All80s, GrrlRock and SavageRockRadio.
The RIAA's Hillary Rosen Hilary Rosen argues that "if you don't have a business model that sustains your costs, it sounds harsh, but that's real life. If a grocery store can't afford to pay for the vegetables, they can't keep their doors open." Further, Rosen declares that most college stations will not owe more than $500 a year, and says, "Given our problems with digital piracy on university servers, it is almost comical that they have the nerve to complain about $500."
However, Will Robedee, general manager of Rice University's KTRU, says, "This isn't a bunch of rich college kids who don't want to pay the fee." He adds, "the better we do our job, by attracting more listeners, the more it will cost us, even though we're not making money," when the new rates demand per-song, per-listener fees.
The music industry has not completely alienated the small Webcasters. John Simson, executive director of SoundExchange, formed by the RIAA to collect royalties from new media, is willing to work out a compromise with the small Webcasters to keep them in business, but has not developed a plan yet. "We want to reach a resolution well in advance of the Oct. 20 deadline," he says.
In support of small stations such as Robedee's KTRU, Rep. Rick Boucher is expected to introduce a bill this week, whose "goal is to make sure the small Webcasters who measure their revenues in the tens of thousands are not put out of business by a copyright payment requirement in the hundreds of thousands."
While the royalty fee debate continues to play out, a concert will air tonight at 7:30 ET at the State Theatre in Falls Church, Va., and on the Web at www.webcasters.org, to benefit small Webcasters.
Check out the USA Today for the full article.
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