Internet radio broadcasters will need to fend for themselves in the face of efforts by the music industry to raise royalty fees. That's the word from a 6/28 House Small Business Committee hearing on resolving a dispute over efforts to increase the royalties paid to musicians and labels. Webcasters say the new Copyright Royalty Board-set fees will put them out of business. The increase begins 7/15.
Said House Small Business Committee Chairwoman Nydia Velazquez (D-NY): "I really don't think Congress would be the best type of vehicle to resolve this type of issue. July 15 is just around the corner, and I hope the two parties can come together and resolve this issue."
Meanwhile, The Internet Radio Equality Act is making its way through committees in the House and the Senate, while the recording industry plans to impose new royalty fees on terrestrial radio as well. Webcasters are also appealing the CRB decision and hope an appeals court judge will take the case before 7/15. The court may not act on time, however.
In the House, 121 members have co-sponsored the Internet Radio Equality Act, proposing charging Webcasters the same royalties as satellite radio broadcasters. Currently, 12 Representatives who have co-sponsored the bill sit on the Small Business Committee.
Four sponsors of a similar bill going through the Senate include John Kerry (D-MA).
Said WOXY.com GM Bryan Miller at the hearing: "I can guarantee that if WOXY.com had not been acquired [by lala.com] and was still a stand-alone entity, the new royalties would have been the end of the road for us at that point…So why should you care about Webcasters who are a hair's breadth from going under, even before they face the higher royalty rates? I would argue that we deliver so unique for artists and music fans that our existence should be supported and encouraged, and not hindered during the early years of our industry. Musicians stand to lose valuable exposure provided by Internet radio outlets."
"The recent decision by the Copyright Royalty Board to increase royalty fees may jeopardize the mutually beneficial relationship [between webcasters and copyright holders]," co-chairman Steve Chabot (R-OH) said. "The decision and the outcry on both sides raises questions and concerns about what is needed to fairly and adequately compensate recording artists and labels, while making it tenable for net radio to stay on the air…The parties to the conflict are best suited to devise a remedy that is workable and equitable."
Rep. Jay Inslee (D-WA) encouraged all parties to sit down and renew talks, because it's unlikely a legislative solution can resolve this problem before 7/15: "Whatever congressmen and women have heard to date, you're going to hear five to ten times as much after July 15," he said.
Said Rep Hank Johnson (D-GA): "My hope is that we won't help one segment of our population at the expense of another. I'm concerned that…the CRB came up with a decision based on input from so many different interests and stakeholders, and now, five years later, there's a push to just change everything. Something doesn't feel right about it. I do want to see further justification."