CRB decision a call to action for broadcasters
By Jennifer Lane
The recent decision issued by the Copyright Royalty Board (CRB) with regard to performance royalties to be paid by online radio stations for the next five years is a call to action for the broadcasting industry. Given the fact over 50 million Americans now listen to online radio each month, one can assume that the recording industry does not want online radio to disappear. Listeners have found a new way to discover and listen to music. They choose Internet radio for its greater choice of format, and its decreased commercial load. And they listen longer. At the record label level, the recording industry sees value in this.
Yet the rates issued by the CRB decision are unaffordable - probably equaling over 100% of total revenues for most webcasters now, and rising 30% per year for the next four years.
So what does this mean for Internet radio?
Rates need to be established that both the record companies and the webcasters can live with. That was the purpose of the Copyright Royalty Board in the first place. Given that this decision did not achieve a middle ground that both parties can live with, three possible paths remain. First, there can be appeals to the decision. There were several parties to the CRB proceedings, and any of them can appeal the decision. Initial reviews say that there are grounds for this on a legal basis.
Second, and concurrently, both sides can negotiate a settlement that works. Since we're assuming the record companies actually want Internet radio stations to continue streaming music to their audiences, they should be open to this.
Thirdly, many webcasters believe that the true issue lies in a faulty law (the DMCA) -- so the Internet radio industry needs to work to remedy this situation by getting the legislation amended. One would hope at this point to see the NAB, who has previously taken little interest in streaming radio, make this a priority.
Online radio presents an enormous opportunity for broadcasters to grow their audience and expand their relationship with listeners. As wireless technologies advance, Internet radio will become more and more popular. Realizing that potential, broadcasters have begun streaming their content online and are not going to easily cede this distribution channel. Broadcasters should let NAB know that this is an important issue that must be resolved.
One thing all these stations have going for them is their listeners -- listeners who are passionate about their favorite webcasts and do not want to lose them. Stations can make their listeners aware of the issues using a resource such as www.savethestreams.org .
There is a lot at stake right now with regard to Internet radio both for listeners and for stations. The audience is growing at a rate of 50% a year and more and more listeners are finding a favorite online station every day, attracting advertisers' attention and budgets. This disaster could be the factor that motivates the industry to take the bull by the horns and get what it needs to survive not for the next five years, but permanently.
Jennifer Lane is President of Net Radio Sales. She can be reached at [email protected]
