Royalty Board Lowers Rates for Internet Music

On February 16, 2009 a deal was reached that will lower the rates set in 2007 by the Copyright Royalty Board for Internet radio webcasters. In its 2007 decision, the board had significantly increased the rates that these operators were required to pay artists and recording companies.


The National Association of Broadcasters and SoundExchange (a group that collects royalties) agreed to lower these rates by approximately 16 percent in 2009 an 2010. That means for every song per 1,000 listeners in 2009, a station will pay $1.50. This rate will raise to $2.50 per 1,000 listeners by 2015. Rate agreements for certain groups, including religious broadcasts and college broadcasts have yet to be negotiated.


In recent weeks, issues related to performance rights have been taking center stage on Capitol Hill. On February 4, 2009, a bipartisan bill, "The Performance Rights Act of 2009" (S. 379) was introduced by Senators Patrick Leahy (D-VT) and Senators Orrin Hatch (R-UT), Dianne Feinstein (D-CA), Bob Corker (R-TN) and Barbara Boxer (D-CA). On the House side, John Conyers (D-MI), Chairman of the House Judiciary Committee, and others have co-sponsored H.R. 848, which was last referred to the Judiciary Committee. This proposed legislation intends to "provide parity in radio performance rights under title 17, United States Code" and would require U.S. terrestrial radio stations to pay performance royalties to various artists. The bill attempts to enhance the level of fairness in the music industry between broadcasters and artists through the establishment of new performance rights.

Because these U.S. stations do not pay artists for their music, foreign radio stations do not compensate performers when their songs are played abroad. This has negatively impacted the music industry, but opponents of the bill such as the National Association of Broadcasters, view it as an "unfair tax" on radio stations. Section 3 of the bill does carve out special treatment for smaller broadcasters, as well as non-commercial, educational and religious stations.


For more information on SoundExchange, please visit:
http://www.soundexchange.com/

For more information on the National Association of Broadcasters, please visit:
http://www.nab.org/AM/Template.cfm?Section=Home

For the full text of H.R. 848, please visit:
http://www.govtrack.us/congress/bill.xpd?bill=h111-848