Crystal Williams

You may have heard, but once again internet radio is facing huge additional royalties for broadcasting music. These royalties are in addition to the ones that already paid to ASCAP and BMI, and are a royalty that is only paid by internet broadcasters. Over-the-air (AM/FM) broadcasters are explicitly exempt from this royalty; it only applies to internet broadcasters and subscription music services.

This, of course, has some pretty major ramifications on small, popular stations. For one example, here’s a section of a letter I got from soma fm:

In the past, we paid royalties based on a percentage of our revenues, in our case 10% of our revenue. But the new royalties don’t allow that percentage of revenue factor, and instead charge us for each song we play times the number of people listening. This works out to about $8 per average concurrent listener per month. In 2006, we averaged over 6000 average concurrent listeners per month, and the royalties we will have to pay for 2006 is about $628,000, over 4 times the amount of money we brought in.

And these rates go up drastically each year, until 2010, where they are 2.5 times their initial rate: by then we will have to pay over $1 million dollars a year in royalties if we want to stay on the air.

So you can see that this puts us in an impossible position. And to make it even worse, the rates are retroactive to 2006.

It doesn’t seem fair that a small radio service like SomaFM has to pay all these additional royalties, when over-the-air stations who reach much larger audiences are exempted from paying them.

If you are in the USA, please sign this online petition which will be presented to members of Congress.

It’s important for us to let Congress know that independent internet radio is about to be forced out of business.

We need to keep our existing “percentage of revenue” royalty rate structure, or better yet, have Congress extend the exemption to internet radio stations as well as terrestrial (over-the-air) stations.

Sign the Petition here – www.petitiononline.com/SIR2007r/petition.html

I know I’ve been a fan of Soma fm and shoutcast radio since 2000. Seven years now. If you’re a fellow avid listener, please take some action here and then go donate to your favorite station (or risk losing them).