Internet Radio music stations are seeing a slight reprieve from the higher fees to play music
By: Captain Maverick
Published: Jul 18, 2007
Updated: Sep 2, 2010
SoundExchange is the organization that collects the royalties for musicians and of course the record companies. On Monday, most stations continued playing music even as their representatives negotiated lower fees as the recording companies argued for a hike in the fees. But SoundExchange has indicated to webcasters that it would not be seeking immediate payment of the higher rates, yet.
The increase proposed in royalties could have the effect of putting some of these Internet radio music stations out of business. In March, the federal Copyright Royalty Board set higher royalties retroactive of March 2006. The board boosted the amount webcasters must pay per listener for each song they play, from .0762 of a cent to .19 of a cent by 2010. It also eliminated a provision that capped the royalties of small Internet radio stations at 101001743277 1227752370612f their revenues, and set a $500 administrative fee for each Internet radio channel.
Of course air wave radio stations do not pay these royalties, only those operating on the Internet. Some small stations already have shut down because the loss of the revenue-based cap meant they would owe much more in royalties than their stations earn. Webcasters have organized online petitions and appealed the rate increase in court. Some fear that the new rates would squelch the musical diversity.
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