Is the end nigh for Internet radio?

In a recent Wall Street Journal article, Jason Fry outlined last week’s ruling by the US Copyright Royalty Board which proposed new performance royalty rates for online radio stations.

An online radio station would pay .08 cent per song per listener for 2006 (the rates are retroactive), .11 cent in 2007, .14 in 2008, .18 cents in 2009 and .19 cents in 2010. Seems like little enough, but it adds up — and this small change is a big change for small Webcasters. Under a deal brokered in 2002, small Webcasters had met their royalty obligations by paying artists and record labels 12% of revenue, but the new rules would do away with that exemption.

These rates would in effect kill Internet radio. For services like Pandora and “indie” stations like Radio Paradise, fees would surpass revenues. The ruling would also affect terrestrial radio stations that simulcast on the net as well as XM/Sirius satellite radio. Podcasters now operating under the ASCAP/BMI podcast licenses would also have new fees heaped on. The issue can be traced back to … The Millennium Copyright Act of 1998, natch.

This is not a done deal and Internet stations and listeners are preparing to fight the ruling.

Full WSJ article: here
Computerworld article: here