Webcasting Rate Information Due From Copyright Office/Library of Congress at 5pm Thursday.
This is the Copyright Office’s response to its rejection of the Copyright Arbitration Royalty Panel’s (CARP’s) recommendation that internet radio stations should pay a royalty of .14¢ (14/100ths of a cent) per listener, per hour of broadcasting, retroactive to 1998. As Save Internet Radio calculates:
a mid-sized independent webcaster (imagine two or three people working out of a home office or a campus apartment) that has had, say, an average audience of 1,000 listeners for the past three years, the bill for retroactive royalties — which will come due 45 days after the royalty rate is approved — would be $525,600!
And it’s all based on this ridiculous theory that internet radio should pay to use music, but broadcast radio doesn’t need to. The theory is that broadcast radio serves to promote the music while internet radio competes with record sales. I think Hillary Rosen of the RIAA must’ve been smoking crack when she came up with that one.
When I listen to the radio lately, all I hear is the approved 8 songs for this week from Clear Channel Communications or Infinity Broadcasting. If the record companies were only releasing 8 songs between them then — sure, broadcast would be promoting those 8 songs. But internet radio promotes the thousands of smaller bands, indie bands, unsigned bands, regional bands which the no-taste tastemakers haven’t got a clue about.
Besides that, are the broadcast radio stations actually promoting anything but themselves and their local and national advertisers? Although there doesn’t seem to be any definitive study of advertising minutes per hour on radio, the sources I’ve found seem to estimate that music stations are playing 16-22 minutes of advertising, news, weather, etc. per hour of broadcast. So, given that limited music-hole, how can it be claimed that they are a promotional medium?
Basically, today’s announcement will determine the future of internet radio. Either they’ll be taxed out of business, or we’ll get to hear lots of bitching and moaning from Hillary Rosen and the corporate gluttons at the RIAA, claiming how this will really hurt the artists. Like they’d know an artist if they heard one…
