SoundExchange and the National Association of Broadcasters announced Monday that a deal had been reached for Internet-based simulcasts for radio stations. The new rates include a 16% reduction for 2009 and 2010 rates to US$1.50 per thousand listeners (per streamed song), a rate that rises to $2.50 per thousand listeners in 2015.
At issue are the royalties paid to recording labels and artists for Internet streams of music, an ongoing issue that has threatened to put most Internet radio stations out of business -- the royalty rates established by the Copyright Royalties Board in 2007 far exceed what most Internet-based radio stations can collect in advertising.
The CRB's mandate was for $.80 per thousand listeners in 2006, which would rise to $1.90 per thousand listeners in 2010. The agreement reached with the NAB lowers that rate to $1.50 per thousand listeners for 2009 and 2010, but it covers only the large radio stations that are members of the NAB.
Those radio stations are dominated by large corporate concerns where the simulcast is a low-cost addition to their commercial-heavy over-the-air broadcasts. In other words, they can afford the rates.
Internet-only-based radio stations have found it difficult to sell enough advertising to cover the SoundExchange royalties, making their business an impossibility. Those stations are still at odds with SoundExchange, and still subject to the higher rates as dictated by the CRB.