The Copyright Royalty Board released its decision on the royalties to be paid by Internet Radio stations for streaming music during the years 2006-2010. As expected the rates are going up. What may not have been expected is just how significantly the rates will rise over the next few years.More importantly, especially for smaller entities, there are no more royalty rates based on a percentage of revenue. Such a framework existed for small webcasters under the Small Webcasters Settlement Act. Instead, all royalties are given as a per performance number. In other words, a payment will now be due for every listener of every song.
The rates set by the Board for commercial webcasters, including broadcasters retransmitting their over-the-air signals on the Internet, are as follows:
2006 - $.0008 per performance
2007 - $.0011 per performance
2008 - $.0014 per performance
2009 - $.0018 per performance
2010 - $.0019 per performance
The minimum fee is $500 per channel per year. There is no clear definition of what a “channel” is for services that make up individualized playlists for listeners.
For noncommercial webcasters, the fee will be $500 per channel, for up to 159,140 Aggregate Tuning Hours (one listener listening for an hour) per month. Noncommercial webcasters who exceed that level pay at the commercial rate for all listening in excess of that limit. Curiously, this “simple” fee structure took 115 pages for the Copyright Royalty Board to explain.
The Board, in making its decsion, essentially adopted the royalty rate advanced by SoundExchange (the collective that receives the royalties and distributes the money to copyright holders and performers) in the litigation. It denied all proposals for a percentage of revenue royalty (including a proposal that SoundExchange itself advanced). The Board also rejected any premium for streams received by a wireless service, as SoundExchange had suggested.
