WebProNews

In a decision that could drive the nail in the coffin to Internet radio providers, the U.S. Copyright Royalty Board has endorsed a proposal by SoundExchange to enact royalty rates for webcasts and streaming music sites that will stay in effect from 2006 until 2010.

SoundExchange, the royalty collecting division of the Recording Industry Association of America (RIAA), will seek to retroactively charge webcasters for streaming content delivered throughout 2006 to users, a decision that could send the sites packing for good.

The new rates will require webcasters to pay for each song streamed to each user, and will increase yearly according to these figures:

2006: $0.0008 to stream one song to one listener

2007: $.0011

2008: $.0014

2009: $.0018

2010: $.0019

Eliot Van Buskirk and Sean Michaels of Wired lament the financial implications of the U.S. Copyright Royalty Board’s decision:

Those fees will add up quickly for larger webcasters; the Radio and Internet Newsletter (RAIN) calculates that, assuming that the average station plays 16 songs per hour, sites would have to pay "about 1.28 cents" per listener per hour using the 2006 rate, and would owe this retroactively, in addition to licensing fees going forward.  RAIN's math indicates that the rate would render Internet radio unsustainable, or at the very least, more ad-laden than terrestrial radio -- and that's before the songwriters' licenses are taken into account.

And this Techdirt piece continues the thought:

The new rates pretty much decimate a large portion of the industry. And, it's only going to get worse, as the royalty rates increase at incredible rates ("2007's rate is a 37.5% increase over 2006; 2008 and 2009's annual increases are about 28% per year; and 2010 adds another 5.5% increase.") Of course, this is utterly backwards and damaging to the industry itself.

A webcaster (especially the smaller, independent ones) is a great means of promotion for artists. It tends to attract more loyal and well-targeted audiences, who are more likely to want to later go out and buy a CD, a t-shirt or attend a concert. It lets the industry better promote material from a wider range of artists. However, in the industry's desperate need to charge for every single use, they're effectively killing off yet another wonderful promotional vehicle.

I’m sure it’s all for a good cause, right? I mean, we can rest assured that the RIAA is only seeking to make sure that artists are properly compensated for their efforts.

Now, If I could only find one of these musicians who has actually gotten a check from the RIAA.

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