Help Save Internet Radio – It is in grave danger!
The SaveNetRadio Coalition
The future of Internet radio is in immediate danger. Royalty rates for webcasters have been drastically increased by a recent ruling and are due to go into effect on May 15 (retroactive to Jan 1, 2006!). If the increased rates remain unchanged, the majority of webcasters will go bankrupt and silent on this date. Internet radio needs your help! H.R. 2060, The Internet Radio Equality Act was introduced by Representatives Jay Inslee (D-WA) and Donald Manzullo (R-IL ) to save the Internet radio industry. Please call your congressperson to ask them to co-sponsor H.R. 2060 by clicking below.
LIMSfinder.com is a web site devoted not only to serving the laboratory community but to promoting all aspects of using the Internet for all facits of life. One very important aspect of the Internet is being threatened very seriously… Internet Radio.
Please read about what is going on to silence Internet Radio and to kill off your freedom of choice for listening. Make your voice heard. It WILL MAKE A DIFFERENCE. Join the petition to save Internet Radio. Click on the following banner to be taken to the site that provides you with the tools to make you voice heard.
Thanks from all of us at LIMSfinder.com: (click the banner below to help now!)
About the Coalition
The SaveNetRadio coalition is made up of artists, labels, listeners, and webcasters. Please contact us if you are interested in sponsoring an event, making a donation, or would like to become a leader in the fight to save Internet radio. The recent ruling by the Copyright Royalty Board to increase webcasters’ royalty rates between 300 and 1200 percent over the next 5 years jeopardizes the industry and threatens to homogenize Internet radio.
Artists, listeners, and Webcasters, have joined our coalition to help save Internet radio. The coalition believes strongly in compensating artists, but Internet radio as we know it will not survive under the new royalties. We need your help. Please take a moment to call your members of Congress to let your representatives know how much Internet radio means to you. Together, we can force Congress to create a structural solution for this problem and create an environment where Internet radio, and the millions of artists it features, can continue to grow for generations to come.
About the Issue
On March 2, 2007 the Copyright Royalty Board (CRB), which oversees sound recording royalties paid by Internet radio services, increased Internet radio’s royalty burden between 300 and 1200 percent and thereby jeopardized the industry’s future.
At the request of the Recording Industry Association of America, the CRB ignored the fact that Internet radio royalties were already double what satellite radio pays, and multiplied the royalties even further. The 2005 royalty rate was 7/100 of a penny per song streamed; the 2010 rate will be 19/100 of a penny per song streamed. And for small webcasters that were able to calculate royalties as a percentage of revenue in 2005 – that option was quashed by the CRB, so small webcasters’ royalties will grow exponentially!
Before this ruling was handed down, the vast majority of webcasters were barely making ends meet as Internet radio advertising revenue is just beginning to develop. Without a doubt most Internet radio services will go bankrupt and cease webcasting if this royalty rate is not reversed by the Congress, and webcasters’ demise will mean a great loss of creative and diverse radio. Surviving webcasters will need sweetheart licenses that major record labels will be only too happy to offer, so long as the webcaster permits the major label to control the programming and playlist. Is that the Internet radio you care to hear?
As you know, the wonderful diversity of Internet radio is enjoyed by tens of millions of Americans and provides promotional and royalty opportunities to independent labels and artists that are not available to them on broadcast radio. What you may not know is that in just the last year Internet radio listening jumped dramatically, from 45 million listeners per month to 72 million listeners each month. Internet radio is already popular and it is already benefiting thousands of artists who are finding new fans online every day.
Action must be taken to stop this faulty ruling from destroying the future of Internet radio that so many millions of listeners depend on each day. Instead of relying on lawyers filing appeals in the CRB and the courts, the SaveNetRadio Coalition has been formed to represent every webcaster, every Net Radio listener, and every artist who enjoys and benefits from this medium. Please join our fight for the preservation of Internet radio.
MYTH: Broadcast radio, satellite radio and Internet Radio pay the same amount of royalties to creators of music, or pay proportionate relative to the size of their businesses.
FACT: The smallest medium – Internet radio – pays the most royalties; and under the new CRB royalty scheme the smallest webcasters will pay the highest relative royalties in amounts shockingly disproportionate to their revenue.
- Broadcast radio, an industry with $20 billion in annual revenue, is exempt and pays no performance royalties to record companies or recording artists.
- Satellite radio, which has approximately $2 billion in annual revenue pays between 3 and 7% of revenue in sound recording performance royalties.
- The six largest Internet-only radio services anticipate combined revenue of only $37.5 million in 2006, but will pay a whopping 47% (or $17.6 million) in sound recording performance royalties under the new CRB ruling. In 2008 combined revenues will total only $73.6 million, but royalties will be 58% or $42.4 million.
- Small Internet radio services are essentially bankrupted by the CRB ruling, with most anticipating royalty obligations equaling or exceeding total revenue.
MYTH: Internet Radio isn’t really that big anyway. Most people still listen to traditional FM radio.
FACT: At some point every day more than 7 million Americans are listening to Internet radio. Studies by Arbitron and Bridge Ratings conclude that between 50 and 70 million Americans listen to Internet radio every month, and about 20 percent of 18-34 year olds listen to Internet radio every week.
MYTH: If Internet Radio is so big the higher royalty rates should be affordable.
FACT: Internet radio is a relatively new industry with advertising models still developing. Some services rely on banner ads; others are selling traditional audio ads; and still others rely on sponsorships. The vast majority of Webcasters will not be able to generate enough advertising revenue to pay their new, higher royalty fees.
MYTH: The webcasters’ previous royalty rate was too low and needed to be increased to ensure that artists and record companies are paid fairly.
FACT: Bankrupting the Internet radio industry will not benefit artists or record companies, as total industry royalties will diminish. Moreover, the demise of Internet radio will be particularly harmful to independent artists and record labels whose music is rarely played on broadcast radio. The American Association of Independent Music reports that less than 10% of terrestrial radio performances are independent music but more than 37% of non-terrestrial radio is independent music. This benefits artists, labels and music fans.
When Congress provided webcasters a guaranteed “statutory license” to perform sound recordings, Congress intended that Internet radio would flourish as a competitive medium offering diverse programming and paying a royalty. Tripling webcasters royalties undermines all these goals.
MYTH: Big webcasters can afford these royalties and they will each offer hundreds or thousands of channels, so what’s the big deal?
FACT: The CRB royalty is so high that even the biggest Internet-only radio services – including Yahoo, AOL, MTV and RealNetworks – will pay a combined 50+ percent of their revenue for only this single royalty. The only way to make a profitable, scalable business will be to attract the largest audience and advertisers while reducing overhead and innovation. The result will be “mass appeal” Internet radio programming that will look much more like today’s broadcast radio, rather than the diverse programming that exemplifies today’s Internet radio.
MYTH: The rate is only increasing from 7/100 of a penny per song streamed to 19/100 of a penny per song streamed over a 5-year period.
FACT: Nearly tripling the per-song royalty rate is only the first insult.
- No Revenue-based Royalty Option. Prior to this decision all small webcasters and some large webcasters had the choice of paying royalties based on a percentage of their revenue that typically equaled 10-12%. But the CRB decision did not offer a revenue-based royalty option for any webcasters.
- Retroactive Impact. The CRB decision is effective as of January 2006, so if it actually becomes effective for only one day its impact will be immediate as the past due royalties alone will be enough to bankrupt virtually all small and mid-sized webcasters.
- Per Station Minimum. The CRB piled on even more, by imposing a $500 per channel minimum royalty that for many services will far exceed the annual royalties that would otherwise be due even after the CRB decision. One advantage of Internet radio is that it is not limited by spectrum capacity or bandwidth capacity, which enables several services literally to offer 10,000 or 100,000 stations and more. By penalizing this innovation and creativity the CRB further ensures that Internet radio will become less creative, less dynamic, less of an opportunity for non-mainstream artists and genres, and will look more like broadcast radio in the future.
