On Friday March 2nd 2007, the Copyright Royalty Board announced new royalty rates for Internet Radio stations. The rates are retroactive to January of 2006.
The new rates are far higher than any industry experts expected. In fact, if they remain unchanged, bankruptcy looms for many online radio stations.
The new rates essentially levy a tax of $0.0011 per performance. Now, that doesn’t sound bad does it. But consider this. Each hour, the average radio station plays 16 songs. So that’s about 1.76c per hour, per listener. A station with 500 listener average would be hit with fees of $211 per day, $6,336 a month or $76,000 a year.
This amount of money is beyond the resources of all but the very wealthiest of corporations. Many of the internet radio stations are run by enthusiasts and hobbyists. These small stations are the ones bringing new music, and old favorites to you every day. Music you can’t hear on corporate-owned terrestrial stations.
Could this be the day the music died?
Thanks to Rex Hughes for the link.