RIAA’s new plan to kill Webcasters

By Vivek | March 5th, 2007 at 01:06 am ET         

According to RAIN, RIAA’s per play rate proposal has been adopted by the The Copyright Royalty Board (CRB). This is other terms means that Webcasters will be charged for the performance of each song that is streamed to an individual user. If the proposal is finally published in the Federal Register it would result in a Webcasters’ royalty obligation be equal to over 125% of their total income. As per the progressive rate structure Webcasters will have to give $.0008 per performance in 2006, $.0011 per performance in 2007, $.0014 per performance 2008, $.0018 per performance 2009, and 2010 $.0019 per performance. Not a big increase from the first look, but does add up to very high numbers when you account for the total performances. “Performance” in this case is the streaming of one song to one listener. Besides these fees, a minimum fee of $500 will be charged per channel per year. Again no clear definition of the word Channel has been given. Channel in Webcasting terms(playlists) means a lot different than for an ordinary radio station or TV. RAIN did some quick calculations on the royalty obligation for AOL Radio Network, which approximately played 2.1 billion songs in November 2006. Going by the new rate structure AOL will have to pay $1.65 million for November which comes to about $20 million for 2006. Such high royalty rates ultimately means death of Pandora and likes.

Again, this a developing story with no such updates available on RIAA and CRB sites. I will watch for updates.

Links:
RAIN: Webcast Royalty Rate Decision
Save Internet Radio