SaveNetRadio loses their court appeal

[W(TF)]

Net radio firms face crippling royalty hikes

A U.S. federal court of appeals denied an emergency stay petition from internet radio broadcasters Thursday, clearing the way for potentially crippling online broadcast royalties to take effect Sunday.

 

'An invoice of more than one billion dollars must be paid in four days, which is unfathomable for an industry that grossed less than $200 million last year.'—Jake Ward of SaveNetRadio

SaveNetRadio, a coalition of web broadcasters, had sought the emergency stay from the U.S. Court of Appeals for the District of Columbia Circuit, protesting that the proposed new rates would destroy the fledgling industry.

 

The controversy began on March 2, when the U.S. Copyright Royalty Board decided to scrap the existing system, which had webcasters paying 10 to 12 per cent of their revenue, in favour of a per-song, per-listener rate.

 

The new royalty system forces webcasters to pay 0.08 cents per listener, per song, retroactive to 2006. The rate rises to 0.19 cents in 2010.

 

Many smaller broadcasters have already shut down in anticipation of the increased fees, and the court's decision is expected to lead to further closures.

 

The four largest internet-radio providers — Pandora, Yahoo, Rhapsody and Live365 — can handle the royalties more easily, but said they would continue to lobby Congress to review the rate hike.

 

Jake Ward, a spokesperson for SaveNetRadio, voiced frustration with the turn of events.

 

"We are disappointed that the court failed to acknowledge the irreparable and quite frankly, devastating effect these new royalties will have on the internet radio industry," he said in a press release.

 

"An invoice of more than one billion dollars must be paid in four days, which is unfathomable for an industry that grossed less than $200 million last year."

 

However, he also promised a strong stand on behalf of listeners and broadcasters.

 

"This is a setback, but it is certainly not the end of the road. More than 70 million Americans listen to internet radio and tens of thousands of artists depend on webcasters to promote their music; webcasters aren't going to simply give up the music they love without a fight," he said.

 

"We will fight against this unreasonable rate increase until a solution is reached."

Smaller broadcasters had been offered fee cap

 

Royalties are paid to SoundExchange, a music industry agency that distributes they payments to artists and record labels and the group says it has made efforts to meet some smaller broadcasters halfway.

 

Michael Huppe, a lawyer for SoundExchange, said it was still negotiating with internet broadcasters to reduce the burden on small and non-commercial webcasters.

 

Both sides of the argument met Thursday in a meeting organized by members of Congress and SoundExchange offered an annual fee cap of $50,000, if the broadcaster reports everything that is played and adopts technology that limits the ability of listeners to copy broadcasts.

 

The annual fee can be deducted from the royalties paid to artists and record labels.

 

 

Still too expensive, broadcasters argue

However, many smaller broadcasters say they can't afford that much.

 

For example, Michael Clark of Woodbridge, Va., was forced to close one of his two all-Christmas music stations after discovering that the fee hike wouldn't even allow him to broadcast through the Christmas season alone.

 

"Barring some kind of miracle from the court system (far fetched), Congress (near-impossible), or SoundExchange, my plan is to shut down the flagship station, Christmas Music 24/7, entirely on Friday the 13th, truly an unlucky day," Clark wrote on his station website.

 

"I'll miss sharing my love of Christmas music with thousands of my friends from across the world."

[cryptique]

Yeah, but on Friday there was this (from wired.com):

 

Net Radio Wins Partial Reprieve as Royalties Loom

 

Eliot Van Buskirk Email 07.13.07 | 2:00 AM

 

SoundExchange, a group responsible for collecting music broadcasting royalties, on Friday confirmed it has proposed new terms for internet radio that could lower fees for some webcasters.

 

While limited in scope, Thursday's proposal offers a partial reprieve for smaller sites facing the axe Sunday when a payment scheme approved by the Copyright Royalty Board, or CRB, is set to take effect. Webcasters have said the fees would effectively force many services that personalize individual channels for listeners to close shop by the end of the weekend.

 

Under the new proposal, which must be implemented by the CRB, SoundExchange would cap the $500 monthly per-channel minimum fee at $50,000 per year for webcasters. In exchange, webcasters would be required to provide more detailed data on the music that they play and make an effort to stop unauthorized copying from streamrippers -- software that can turn ephemeral net radio streams into permanent recordings.

 

In addition to the minimum caps proposal, Webcasters were given assurances that negotiations would continue to work out breathing room for small and non-commercial broadcasters.

 

 

[W(TF)]

"Big Business Wins Again", is my take. I admit I'm a cynic, but isn't it funny how the Canadian and US news services report the same story from a different angle? (or different emphasis)

 

Mine was from cbc.ca , btw.

[cryptique]

"Big Business Wins Again", is my take. I admit I'm a cynic, but isn't it funny how the Canadian and US news services report the same story from a different angle? (or different emphasis)

 

Mine was from cbc.ca , btw.

No, your story was how it was reported down here too -- but that was from Thursday. On Friday, there was a reprieve, albeit one that may only be temporary.

[W(TF)]

I mean, it just seems moronic to me. I have enough LP's to start a 'classic rock' (or jazz) radio station...I paid for them all, the artists have all received their royalties. They should pay ME to promote their music, not the other way around. Ultra maroons.