Webcasters must also pay royalties retroactively

The Copyright Royalty Board (CRB) thoroughly rejected arguments made by the International Webcasting Association that music broadcast online should remain royalty-free. Instead, the CRB sided with the SoundExchange royalty organization.

Webcasters are now faced with new and increased royalty rates for songs that are streamed to listeners. Additionally, webcasters are forced to retroactively pay for songs that were streamed before the new law was even introduced.

The SoundExchange royalty program was only accepted by the CRB this month, the royalty program applies to webcasts in 2006 as well.  According to the royalty rates published by the Radio and Internet Newsletter, RAIN, fees are applied on a per song, per listener basis:
  • 2006: $0.0008 per performance
  • 2007: $0.0011 per performance
  • 2008: $0.0014 per performance
  • 2009: $0.0018 per performance
  • 2010: $0.0019 per performance
Each performance is defined as a session between the radio channel and user.

The rates applied by the SoundExchange program also increase as each year rolls by, adding costs to webcasters very quickly. According to RAIN, the average station plays 16 songs per hour, which would add up to $1.28 per hour, per 100 listeners for 2006.

Additionally, there is a minimum fee of $500 per channel per year, though the CRB has not clearly defined "channel" yet.  The rate implementation still can be appealed by organizations like the International Webcasting Association within 30 days after it is published in the Federal Register.

SoundExchange and the Recording Industry Association of America also successfully leveraged XM Radio into charging fees for its online streaming radio service.  The RIAA sued XM early last year to retroactively reclaim royalties on streamed music.

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