Yesterday the Tech Notes blog reviewed the Internet radio service Pandora. Ironically, also yesterday the U.S. Copyright Royalty Board denied a motion for a hearing to review a decision issued in March that dramatically increases royalty fees owed by Internet radio services over the next several years, which by most accounts threatens the existence of the industry.
Infoweek describes the change: "According to the new ruling, the basic rate, which in 2005 was .0076 cents per song, would go to .08 cents for 2006, .11 cents in 2007, .14 in 2008, .18 cents in 2009 and .19 cents in 2010. The new rule also added a flat fee of $500 per station. An alternative deal struck in 2002 that allowed small Webcasters to pay royalties of a flat 12% of revenue would disappear, along with other provisions, including a concession for public broadcasters." You can read more about the ruling in this c|net article.
In response, a coalition of artists, labels, listeners and webcasters has launched a campaign to SaveNetRadio and "preserve diversity of music on the Internet and the future of Net radio itself." The site has a variety of information on this issue, and offers Internet radio listeners a way to sign a petition in support of Internet radio.
For an analysis of the scope of the problem, see this interesting article on the Radio and Internet Newsletter site, which examines a report by JP Morgan analyst John Blackledge. The report warns many smaller Internet radio operators could go bankrupt, "given that just the royalty costs alone might actually equal or exceed current revenue."
Take a look at the available information, and consider signing the petition if you value Internet radio.
