New Royalty Ruling Leaves the Future of Internet Radio in Doubt

I have operated an Internet-based Christmas music radio station since November 2004. In 2006 I took the station professional, and in December 2006 ended up being the third most popular station of the approximate 7,000 stations at Live365.

On March 2, the Copyright Royalty Board (CRB) issued the significantly higher new royalty rates for Internet radio for the 2006-2010 period. They changed the guidelines for how royalties are calculated for the music that is played on Internet Radio stations. The old guidelines were based on a percentage of the money earned by an online station, with a baseline fee of $2,000. So for 2006 (and 2007) I paid $2,000 per year to legally broadcast Christmas music. I earned $1,076.27 in 2006. So my love of Christmas music cost me around $933 for the year (not including the time I put into the station). It was definitely worth it.

The new guidelines ignores income, and charges broadcasters for each listener that hears each song. The rate for 2006 is to be $.0008 per listener per song. So the bill for me for 2006 will be approximately $6,276.32. This of course cannot continue, since I don’t want to put my family into the poorhouse. So I have been forced to reduce the number of listeners that can listen to the stations at one time.

More information is available at the Live 365 web site: New Royalty Rates Threaten Small and Large Broadcasters.

I will post new information as it becomes available.