Web Radio Decision Reached - Neither Side Happy

by Alan Sheckter, SmartTV & Sound news editor

The U.S. Copyright Office reached a decision June 20 regarding Internet radio music royalties, settling on charging WebCasters 70 cents per song, per 1,000 listeners. The ruling left both sides of the issue unhappy. Experts predict that many small Internet WebCasters, a network of an estimated 30,000 radio stations operated by individual Internet users, will fold due to the newly imposed royalties, which include fees retroactive to 1998. Many of those stations banded together May 1 as part of a Save Internet Radio campaign by participating in a Day of Silence.

While the 70 cents per song, per 1,000 listeners fee may be enough to sink many shoestring-budgeted independent stations, it fell well short of what the Recording Industry Association of America considered fair. According to the Associated Press, the 70-cent rate “simply does not reflect the fair market value of the music,” said RIAA President Cary Sherman. Originally, according to techtv.com, the RIAA had hoped for a rate closer to $4 per song per 1,000 listeners.

In February, a Copyright Arbitration Royalty Panel made a recommendation of $1.40 per song, per 1,000 listeners. That figure was rejected in May by Librarian of Congress James Billington, to the delight of small Internet radio operators. Even though the new ruling is only half of that, it is expected to be enough to sink many stations.

Opponents of the June 20 have 30 days to appeal to the U.S. Court of Appeals for the District of Columbia Circuit. The court could modify or entirely set aside the decision if it felt compelled to do so.