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Monday, July 23, 2007

Web-based music gets royal[ty] screwed

Taking advantage of inexpensive broadcasting and digital music, internet radio has become a significant way for music listeners to find customized playlists and other ways to discover new, or arrange already known music. As many as 50-70 million Americans tune in to an internet stream during a given month. But that was before a decision by the Copyright Royalty Board allowing recording studios to get much higher royalties from 'net radio stations. Among the concerns of the Sound Exchange (collectors of the royalties): digital music streams are too easy to copy, and internet radio stations should pay per listener fees because - unlike regular radio - they know exactly how many folks are listening.

The problem is that most internet radio gigs make very little money. Under the previous royalty regime, internet radio stations could pay royalties as a percentage of revenue (~10%), so even cash-poor stations could broadcast. Under the new regime, all internet radio stations will have to pay a royalty per song played (and per listener), with a $500 minimum.

Read the latest news here, learn more from net radio advocates here, or check out this modest proposal from a Wired columnist.

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