Fair Royalties: New Agreement Rescues Internet Radio
Independent internet radio service providers have struck a deal with the Copyright Royalty Board that will keep them afloat. The internet stations were concerned that astronomical royalties would inflate their costs to the point of sinking their businesses. Some had worried that required royalties could potentially be set at double their total revenue!
Internet radio stations continuously stream music and draw over 42 million American listeners every week. Traditional radio stations have licensing agreements in place which enable them to legally broadcast music and which are paid for by substantial income from advertising.
The contract agreed upon by the parties spans 10 years, expires in 2015, and includes a graduated royalty fee structure whereby artists and record companies receive progressively higher payouts over time which may be tendered in the form of a cut of the stations’ profits. The compensation paid will be directly proportional to the popularity of the radio stations.
Some key stations, such as such as Pandora, have yet to join the deal, but it is anticipated that they will soon sign on the dotted line. Such an agreement was critical for internet radio as it needed a plan that would enable it to be financially viable. The industry is still fairly new and in its formative years, so very few independent providers are turning a profit right now. It will take some time before these providers can compete with larger stations that are affiliated with large media conglomerates.
I love internet radio and listen to it practically every day! It has so many more dimensions than regular radio and gives users new ways to mix and match music to suit their individual tastes. I’m glad that some middle ground could be found so that internet radio can go on uninterrupted!
Are you a fan of internet radio? Let me know what you think!
Controversy surrounds a future Washington D.C. 
