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NAB “Disappointed” With Copyright Royalty Decision
The Copyright Royalty Board issued its final proposal on royalty rates for webcasting last week. The three-judge CRB decision set a per-song, per-listener rate, as opposed to the “percentage of revenue” option favored by smaller webcasters. The proposal includes raising the dollar amount that commercial Internet radio services pay to record companies by 30 percent retroactively to 2006 and in each of the next three years through ‘09. Each station would have to pay a minimum $500 royalty payment.
As for why they chose to set a per-song, per-listener rate as opposed to a fee based on a share of a webcaster’s revenue, the Board wrote: “In reaching a determination, the Copyright Royalty Judges cannot guarantee a profitable business to every market entrant. Indeed, the normal free market processes typically weed out those entities that have poor business models or are inefficient. To allow inefficient market participants to continue to use as much music as they want and for as long a time period as they want without compensating copyright owners on the same basis as more efficient market participants trivializes the property rights of copyright owners.”
Commenting on the Copyright Royalty Board’s proposal, NAB spokesman Dennis Wharton said, "It's a disappointing decision. If it stands, there will be less music choice for consumers, and a technology will get stifled in its infancy."
Congressman Edward Markey (D-Mass) weighed in on the decision, saying, "This represents a body blow to many nascent Internet radio broadcasters and further exacerbates the marketplace imbalance between what different industries pay."
And in testimony on Capitol Hill at the Markey-chaired House Subcommittee hearing on Telecommunications this week, Real Networks SVP, Legal & Business Affairs, Robert Kimball said, “Today, Internet competes at least in part with terrestrial and satellite radio. Speaking for Real Networks, we believe that the Sirius/XM merger should be put on hold until Congress creates a level playing field to enable us to fairly compete."
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