The future of Internet radio is in doubt. Royalty rates for webcasters have been drastically increased by a recent ruling and are due to go into effect on July 15 (retroactive to Jan 1, 2006!). If the increased rates remain unchanged, the majority of webcasters will be bankrupt and immediately forced silent.
Last March's decision by the Copyright Royalty Board (CRB) increased Internet radio's royalty burden between 300 and 1200 percent. The 2005 royalty rate was 7/100 of a penny per song streamed; the 2010 rate will be 19/100 of a penny per song streamed. It doesn't sound like much but it'll make it impossible for most webcasters to operate and will make the remaining outlets more reliant on sweetheart licenses that major record labels will be happy to offer as long as the webcaster permits the company to influence the programming and playlist.
As internet DJ Jonathan Tesser wrote in a Wall Street Journal online forum on internet radio, "I've been operating a free-form radio station (www.luckydogradio.com) with Live365 for more than six years, and it's clear that the future of Internet radio is in grave danger if this decision by the CRB is not modified in some way."
Internet radio is taking off. In just the last year Internet radio listening increased from 45 million to 72 million listeners each month. That's a lot of earlobes! Moreover, beyond the mass audience, the diversity of programming is breathtaking and provides significant promotional and royalty opportunities to independent labels and artists that are unavailable on broadcast radio.
But the CRB's decision would destroy this world. The only hope is that sufficient grassroots pressure can be applied in support of the Internet Radio Equality Act, which was recently introduced in both the House and Senate (by the unlikely duo of Senators Ron Wyden, D-Oregon, and Senator Sam Brownback, R-Kansas) to save Internet radio. The bill would put internet radio on par with satellite radio and undo a prohibitive $500 per channel minimum royalty fee as well as undoing other provisions of the CRB decision.
Please implore your senators and reps to co-sponsor and vote in favor of the Internet Radio Equality Act; add a Save Internet Radio banner on your website or blog and ask your friends to join the coalition to save internet radio.