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Our Take on Royalty Rates

The following first appeared as a Billboard.biz Guest Post I wrote as founder/CEO of AccuRadio and a member of the Small Webcaster Alliance. It appeared on Tuesday, the eve of yesterday’s subcommittee hearing.

As an Internet radio broadcaster and member of the Small Webcaster Alliance, I’ve been involved in the issue of copyright royalty rates for Internet radio for many years. And I’ve seen vividly that the current royalty rate system threatens to strangle the life out of an industry that is providing both choices for consumers and opportunities for musicians.

Both in 2002 and again in 2009, after the U.S. Copyright Office published rate-setting rulings that would have bankrupted all or most Internet radio providers, Congress had to intervene and ask record labels to negotiate a more-workable rate with webcasters.

The resulting rates are still wildly higher than those paid by other forms of digital radio (i.e., satellite radio and cable radio) and have been barely survivable for most webcasters – with many forced to exit the business entirely. Meanwhile, other companies who could spur innovation in Internet radio remain on the sidelines due to concerns over unsustainable royalty rates.

Kurt Hanson

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