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After nearly 2 1/2 years of battling, commercial Internet Radio webcasters have reached a settlement agreement with SoundExchange–an organization empowered by the Copyright Royalty Board to negotiate different royalty rates on behalf of musicians and record labels–regarding royalty payments for playing music on Internet radio stations.
Tuesday’s settlement resolved a controversy that began in 2007 when online radio stations like Pandora, Blip.Fm, and Last.Fm got in financial trouble when royalty fees suddenly doubled. The settlement allows webcasters to pay a flat fee for royalties, rather than paying royalties on a per-song basis. Without the settlement, Internet radio webcasting would be prohibitively expensive for many online stations. Basically, it allows webcasters to choose one of two rate structures: they can pay lower per-song royalties through 2015, or 25% of their revenue. As the LA Times explains:
The new per-song rates start at 0.08 of a cent per listener for each song played and rise to 0.14 of a cent in 2015, when the agreement ends. The rates set in 2007 by the Copyright Royalty Board started at 0.0762 of a cent but more than double to 0.19 of a cent by 2010. Under the new agreement, large webcasters pay whichever is greater–the per-song fee or the percentage of revenue. Smaller commercial webcasters–those with $1.25 million or less in total revenue–would pay between 10% and 14% of their sales or 7% of their expenses, whichever is greater.
This is excellent news for people who listen to and enjoy Internet radio.
– Megan Bibb
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