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Many broadcasters are worried that the law that passed by the organisations within the Usa, known as Copyright Arbitration Royalty Panel (CARP) and the Recording Industry Association of America (RIAA), requesting a fee dating back to October 1998, and a per-listener per-song fee, will effectively bankrupt independent webcasters.
Successful Webcasters such as "Shout" and "Live365.com" that hosts over 80,000 music or audio based sites will have to close their operations. The ones that manage to survive this will be forced by the CARP proposal, to infringe on your right to privacy. In short, your personal information will be used by organisations such as the RIAA, for marketing and anaylisis. If this law proposal if passed, it will take effect on the 21st May, 2002.
Here's how it all works. Traditionally Radio Broadcasters have had to pay royalty payments each time they play a certain artists record on "air". Now this law extends on what Radio Broadcasters will have to pay record companies that these composers/artists are on.
Traditionally the law governing Radio Broadcasts has meant that the promotional value of the airplay was sufficient compensation to those parties. Now these same record companies are now wanting to be paid.
Most Webcasters had hoped that the CARP's recommended royalty rate would be based on a percentage of revenues - somewhere between the 15% of revenues that the RIAA had been asking of Webcasters and the 3% that Webcasters had proposed (which would be more in line with their ASCAP, BMI, and SESAC royalties to composers).
On February 20, 2002, however, the CARP arbitrators issued their recommendation - .14¢ per song per listener (that's $.0014) for Internet-only webcasters, .07¢ per song per listener ($.0007) for broadcast radio simulcasts, and .02¢ per song per listener($.0002) for non-commercial radio simulcasts.
While CARP's proposed royalty rate might be manageable for Internet radio properties owned by multi-billion-dollar corporations like AOL, Yahoo!, and Microsoft, it seems as if it will effectively bankrupt the vast majority of Webcasters.
For example, for a mid-sized independent webcaster (e.g., two or three people working out of a home office or dorm room) that has had, say, an average audience of 1,000 listeners for the past three years, the bill for retroactive royalties -- which will come due sometime early this summer if the CARP rate recommendation is approved -- would be $525,600 (American Dollars!)
However some late news in about Internet Broadcasting law could mean a last minute reprive for many Internet Webcasters.
Dubbed "The Internet Radio Fairness Act," the bill would exempt from royalties any business that makes less than $6 million in annual revenue, a group that would include the vast majority of online radio stations unaffiliated with a larger Internet or broadcasting company. This bill was produce on Friday, 26th, July, 2002.
The bill, which had been expected for several weeks, follows a controversial June, 2002 ruling for Webcasting in which stations were ordered to pay about .07 cent per song, per listener for the rights to play music online. Although record labels criticized the sum as too low, small Webcasters said the fees would quickly add up to thousands of dollars, driving many out of business.
"Small Web radio stations are bearing an unfair burden under the (copyright panel's) decision, and the public stands to lose access to these useful services unless the law is changed," said Rep. Jay Inslee, D-Wash., one of the bill's co-sponsors."- said Rep. Jay Inslee, D-Wash., one of the bill's co-sponsors.
(* - Taken from http://news.com - written by John Borland, - jborland@cnet.com 20th July, 2002 )
Already hundreds of small Internet stations have stopped streaming, or have radically changed their programming, Many more are expected to follow suit as the October, 2002 deadline for initial royalty payments approaches.
Webcasters, or Internet Radio lobbiest state that their following comes from mostly music fans who believe they're giving valuable exposure to dozens of genres of music, and thousands of artists that can't get airplay on broadcast radio. Thus, webcasters would like to think that they're helping increase CD sales!
But Groups sponsored by the RIAA, such as SoundExchange, Usa, state,
"These Webcasters are businesses. Why shouldn't they pay fair market value for the music which is the very core of that business?"- said John Simson, executive director of SoundExchange, a group sponsored by the Recording Industry Association of America and formed to distribute royalties to labels and artists. (* - Taken from http://news.com - written by John Borland, - jborland@cnet.com 20th July, 2002 )
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