Petteri Pyyny
21 Jun 2002 2:58
Librarian of Congress, James Billington, has set the new webcasting royalty rates and unfortunately it seems that the new webcasting rates are going to kill majority of independent web radio stations even that the rates were cut by half from those originally proposed by CARP (Copyright Arbitration Royalty Panel).
Webcasters were hoping that LoC would have changed the royalty rates from flat fees to revenue percentage, which would have been more reasonable for small webcasters who now face a situation where their revenue is smaller than the royalty rates. New rates are set to $0.07 per performance per listener and those rates are applied retroactively from October, 1998 and first payments are due 20th of October, 2002. Same rates apply for Internet-only broadcasting and re-broadcasting of "real" radio stations. Various web broadcasters have already announced that they will shut down soon or have already shut down their broadcasts because of the rates.
U.S. Reps. Jay Inslee and Rick Boucher are seeking a legal action to change the outcome of the royalty fiasco where Librarian was forced to use "willing-buyer/willing-seller" method to determine the correct royalty rate without a possibility to consider that the current webcasting marketplace is already extremely flawed. Reps said in their joint press release: "We will be considering legislation to change the standard from "willing-buyer/willing-seller" for Internet radio to the traditional fair market formula used by other CARPs. In addition, we want to ensure that all future Carps must take into consideration small business concerns and allow effective participation of small, niche and noncommercial entities. We believe these standards will allow for the development of a viable Internet radio industry and ensure that artists, writers, and record labels are fairly compensated."
In a very unsurprising news, RIAA, has said to consider a possibility to appeal the decision. Obviously recording industry was mildly disappointed by the fact that the original CARP's proposed rates were cut by 50 per cent which would have had even move devastating effect to webcasters.
Both parties can still appeal the decision and analysts expect both sides to do so.
More information:
Radio And Internet Newsletter
Webcasting rates