U.S. Internet Radio Under Threat

A decision was made today which could effectively destroy internet radio in the United States of America.

The Copyright Royalty Board has announced the new pricing plan for broadcasters which until now have been pretty much unregulated.

This new pricing system will be especially worrying to fans of alternative music which for the most part has no representation on the larger commercial radio stations.

The cost for 2007 will be $0.0011 per performance. Which means that for each listener to the station they will have to pay that much per song. To put that in context, say you operate a station which has 1,000 people listening. For every song you play, you will now be charged $1.10. And now say you play 15 songs in a hour. You will being billed $16.50 for every hour you broadcast. The minimum fee will be $500 per station each year.

The Radio and Internet Newsletter comments that "the royalty rate decision — for the performance alone, not even including composers' royalties! — is in the in the ballpark of 100% or more of total revenues." The report goes on to interview webcast operator Bill Goldsmith who says "this royalty structure would wipe out an entire class of business: Small independent webcasters such as myself & my wife, who operate Radio Paradise. Our obligation under this rate structure would be equal to over 125% of our total income. There is no practical way for us to increase our income so dramatically as to render that affordable."

And that's not all, the price is going to rise around 28% for 2008 and around the same again for 2009 and 2010 will see a 5.5% increase. The fees will also apply retroactively for the year of 2006.

For an in-depth analysis of this report see here.