Shaken Internet Radio Stations Face Specter of New Fees... will be forced to close down? The D.C. Circuit Court of Appeals has refused to stop an increase in royalty and broadcasting fees, jeopardizing the future of some stations. As a result of the decision, handed down Wednesday, fee increases will take effect in two days.
The Copyright Royalty Board , which is part of the Library of Congress , decided in March to almost triple royalty rates by 2010 and impose an annual $500 fee per station or channel. The decision was urged by SoundExchange, an organization created by the recording industry.
In recent months, some smaller Web stations shut down in anticipation of the higher fees. More say they will close as a result of the court decision.
Web radio stations and their listeners have been lobbying Congress to pass legislation that would void the Copyright Royalty Board's decision and use a system that would assess royalties based on a station's revenue. But there has not been any legislative action on the proposal.
The four largest Internet-radio providers -- Pandora, Yahoo , Rhapsody and Live365 -- have tens of millions of channels among them. Pandora can afford to pay fees on Sunday but will continue to lobby Congress for changes, said founder Tim Westergren.
"This is just about the artists getting paid fairly," said Richard Ades, spokesman for SoundExchange. "Artists and labels just want a fair share of the pie."
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"Nobody wins when Internet radio gets shut down, including artists who ostensibly are being represented by SoundExchange, the organization pushing for high rates," Westergren said. "It's ironic. If SoundExchange gets their way, it means less money for musicians because people will cease to pay royalties all together."
Today about 70 million people a month listen to Internet radio and thousands of unknown artists depend on webcasts to promote their music, according to the SaveNetRadio, a coalition of artists, labels, listeners and webcasters lobbying Congress.
Jun Mayol , 40, a web designer in Kuwait, doing DJ as a hobby, from Cebu, Philippines, faces the big decision to shut down his Philippine Love Radio station his operation when he found out it would cost him $2,000 a month to operate. Jun had 20,000 listeners a month.
"I never made a cent," he said. "It was a labor of love. Everything has to be paid from my pocket. It is about a Filipino love song geek playing music for the Filipinos in the Philippines and abroad." He is broadcasting from Kuwait.
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