Internet Radio Royalties

I am a huge fan of Internet Radio. I listen to it all the time, on my laptop and on our Sonos system. I listen to broadcast radio stations that stream their station like WEHM in East Hampton, I listen to "internet only" radio like Radio Paradise, and I listen to radio 2.0 services like, pandora, and the hypemachine.

In fact, many of the naysayers about HD in the comments to my most recent post on that topic cite radio over the Internet as the nail in the coffin for satellite and HD radio. I do think that getting radio delivered over the Internet is a great thing and when high bandwidth reliable wireless Internet is available everywhere, that may be the best way to get radio. That’s a long way away, however.

Yesterday, I got a comment from Druce (I always get great comments from Druce) pointing me to this post on RAIN (Radio and Internet Newsletter). I’ll pull some quotes in case you don’t feel like clicking on that link:

The Copyright Royalty Board (CRB) has announced its decision on Internet radio royalty rates, rejecting all of the arguments made by Webcasters and instead adopting the "per play" rate proposal put forth by SoundExchange(a digital music fee collection body created by the RIAA).

RAIN has learned the rates that the Board has decided on, effective retroactively through the beginning of 2006. They are as follows:























$.0008 per performance
$.0011 per performance
$.0014 per performance
$.0018 per performance
$.0019 per performance

A "performance" is defined
as the streaming of one song to one listener; thus a station that has
an average audience of 500 listeners racks up 500 "performances" for
each song it plays.

RAIN goes on to suggest that these rates are non economic for services like Pandora,, and internet only services like Radio Paradise.  RAIN also suggests that these rates aren’t going to hurt traditional radio broadcasters like CBS Radio and Clear Channel. But I don’t understand why they would be non economic for the new players and not for the older players.

Anyway, I am not sure how big of a deal this is, but it certainly seems like a troubling development. If you know more about this, please leave a comment.


#VC & Technology