Last year the U.S. Copyright Royalty Board enacted heavy royalty fees to be paid by online radio stations.  At this time, there was much outrage from webcasters claiming that the rates at which they had to pay royalties for the music was broken, and over time would destroy internet radio.  We’re now seeing proof of this as the negotiations in Washington appear to be in the same place they were last year: Dead in their tracks.  Pandora, one of the most popular internet radio sites out there, may be going offline soon if they don’t see a change in negotiations.  Right now their business is losing money fast, and it’s all because they’re having to pay per song, per listener.  Someone close to Soundexchange, the company responsible for gather royalties, noted that they had been surprised by the U.S. Copyright Royalty Board had selected Soundexchange’s first suggestion, noting that it had been meant to be a starting point for negotiations and not the actually rates.  Now the Royalty Board isn’t to keen to change it.

This to me highlights a much larger problem that we have in Washington, and that is the enormous generation gap, a gap that cause bad legislation to come through regarding technology issues.  We need more people in Congress, or at least some sort of advisory board for Congress, that understands modern technology, how it works, and how it’s developed.  You have to wonder if they realize how many hits popular websites get, and how unrealistic it is to have the pay such large amounts for song per listener.  A regular radio station doesn’t even have to pay these licensing fees because of the fact that they’re basically free marketing, so why are internet and satellite radio any different?

Posted by Wes Mueller on 08/18 at 01:54 PM  •   •  permalink