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What the hell is the Copyright Royalty Board?

crb.jpgThe Copyright Royalty Board is a three-member panel of the US Copyright Office. But a more precise definition might be to say that it’s the government agency trying to kill internet radio.

The Board recently issued new licensing fees which are out of whack with the fees charged to either terrestrial radio stations or satellite radio stations. And because of the low revenue that internet radio stations pull in, these new rates could effectively kill internet radio. As we mentioned in a Daily Memo last week, a petition has been filed with the Board to have a rehearing on the matter. That petition was filed by NPR, one of many groups that object to this new licensing scheme (NPR also has a unique objection, that its own broadcasting should not be treated the same as purely commercial broadcasting).

The Board’s decision is rather appalling and utterly perplexing. And it’s not because the Board wants the internet stations to pay - of course they should pay for the right to broadcast copyright-protected songs. But it’s patently unfair to charge them two license fees that are well beyond the scope of practicability – terrestrial radio only pays one licensing fee and while satellite radio pays two fees, its required payments are significantly less. And it’s not just little internet radio stations (like the wonderful Radio Paradise) which will suffer - this licensing scheme will likely kill the big boys too, like Yahoo’s Launch, because it’s just not an economically feasible system.

The following interview with the founder of Pandora sheds some light on this whole situation, and also explains one of the reasons internet radio is important for music loving folks (aside from the obvious fact that it helps make the day go by faster for many cubicle jockeys). The one thing not clearly explained in the video is how the new royalty works - the per-song rate is charged on a per-song/per-listener basis. In other words, let’s say I run an internet station and have 100 listeners at the moment. For every song I stream, I pay 100 times the rate - that is, one for each listener. And that’s the real killer for these stations. And this video explains all the rest of it:

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Comments

Hey Seth

Thanks for posting the article, and the interesting video interview.

I've been reading up on this issue, and found your post informative -- as well as Shelly Palmer's "What is Internet Radio?" article.

I'm hoping this plan is reevaluated, and that internet radio isn't killed off.

- Jake

The CRB,Sound Exchange & the RIAA don't get it!!!

I thought you might be interested in this, given your coverage of online radio.

The Information Technology and Innovation Foundation (ITIF) just released a report on Internet Radio and Copyright Royalties at an event on Capitol Hill on May 10. In the report, we describe problems with the current copyright royalty system for Internet Radio, and what steps Congress should take to reform this system. Specifically, we say that Congress should grant the same performance copyright to all broadcast technologies; modify the statutory license to allow copyright owners to specific separate rates for each sound recording; and allow copyright owners to assign separate rates to small and non-commercial webcasters.

The report is available on our website at - http://www.itif.org/files/InternetRadio.pdf