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RetroActive Payments? Pay Per Play gone mad.

Posted by Molli Fire on Friday, 2March07

Saw this piece on Hypebot. It discusses song plays on Internet Radio incurring fees retroactively to the beginning of 2006. How can that be fair? If radio broadcasters knew the price per play, isn’t it conceivable that they might have made different choices based on these new prices?
First, here is the article that best sums up the situation from hypebot :

Bad News For Net Broadcasting: Royalty Rates Jump.

It’s a sad day for fans of music on the internet and the creative broadcasters who program it.
The US Copyright Royalty Board has announced new Internet radio royalty rates rejecting the arguments made by webcasters and adopting the “per play” rate requested by digital royalty collection agency SoundExchange. Retroactively through the beginning of 2006 the rates are:

* 2006 – $.0008 per play
* 2007 – $.0011 per play
* 2008 – $.0014 per play
* 2009 – $.0018 per play
* 2010 – $.0019 per play

Radio_10 An analysis from the experts at Kurt Hansen’s Radio And Internet Newsletter concludes, “In 2006, a well-run Internet radio station might have been able to sell two radio spots an hour at a $3 net CPM (cost-per-thousand), which would add up to .6 cents per listener-hour. Even adding in ancillary revenues from occasional video gateway ads, banner ads on the website, and so forth, total revenues per listener-hour would only be in the 1.0 to 1.2 cents per listener-hour range.”

“That math suggests that the royalty rate decision – for the performance alone, not even including composers’ royalties! – is in the in the ballpark of 100% or more of total revenues.”

The link to the Radio and Internet Newsletter link will take you to a detailed and indepth discussion of this deal.

There are plenty of radio and internet broadcasters in this audience, what do you think about this, and how is this affecting you? I am particularly concerned about broadcasting that was ad-free and not generating nearly as much income as this will cost them.

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