Royalty Rates For Internet Radios Might Be Finally Set

By Michael Todd
16:11, September 28th 2008
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Royalty Rates For Internet Radios Might Be Finally Set

An extremely debated issue concerning the royalty rates that Internet radios should pay might reach a resolution, after many years of searching for an appropriate fix.

One of the problems appears to be the intense campaign began by the radio broadcasters, which are accused of pressuring lawmakers to kill the bill. Pandora's founder, Tim Westergren, wrote on the company’s blog that "This is a blatant attempt by large radio companies to suffocate the webcasting industry that is just beginning to offer an alternative to their monopoly of the airwaves," and he requested everyone to call their Congressperson and ask them "to support H.R. 7084, the Webcaster Settlement Act of 2008 - and to not capitulate to pressure from the NAB."

At this point, Internet radio companies must pay record labels and artists double the former fees they paid to stream music online as a result of a federal board's decision that was taken last year. On the other hand, traditional radio companies, including satellite broadcasters, pay a lot less, their fees being calculated by a different set of rules.

H.R. 7084 passed the House today and will go before Senate on Monday, Sept. 28. Over the past few months there have been many discussion on this topic, with the major record companies looking to take back some of the revenue lost through illegal free online music shares and similar activities. As the record sales keep dropping, the people involved in the industry must find new ways to make a profit.



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