US broadcasters fall silent for a day

August 2007

Radio, internet

On June 26 th US online music broadcasters held what was dubbed the “Day of Silence” when they shut down their services to protest a hike in licensing fees that they say threatens their existence. The website for the online demonstration, encouraged visitors to contact their representatives in Congress in support of the “Internet Radio Equality Act”. In total

14,000 Web radio stations went off the air protesting the hefty increase in royalty rates that’s scheduled to take effect July 15. The record label’s collection society, SoundExchange which collects digital royalties for labels and artists, successfully lobbied the Copyright Royalty Board this year to enact the higher, retroactive rates. This decision was upheld by the District of Columbia Court of Appeal who refused to stay the decision. Webcasters say the new rates, which require paying a flat fee per song instead of a percentage of their revenue, could bankrupt them. The new bill, H.R. 2060 or the so-called Internet Radio Equality Act, is pending in the U.S. House. It would scrap the Copyright Royalty Board’s decision and allow Webcasters to continue paying royalties based on a percentage of their revenue. This is the second Day of Silence for Webcasters. In 2002, they went off the air, also to protest rates from the Copyright Royalty Board

Update by Dugie Standeford for Intellectual Property Watch:
The decision by the District of Columbia Court and subsequent moves to legislate in the matter led to a meeting between US webcasters and SoundExchange and this appears to have cooled some of the heat surrounding a 2 March decision by the US Copyright Royalty Board (CRB) setting new rates for Internet radio performances.

With the new rates scheduled to come into effect 15 July, the Digital Media Association (DiMA) said that it is prepared to accept an offer floated by SoundExchange at a roundtable with US House of Representatives Telecom and Internet Subcommittee Chairman Ed Markey (a Massachusetts Democrat). Under the agreement, the annual minimum statutory license fee for the 2006-2010 license term for commercial webcasters not covered by a “small webcaster” license is capped at $500 per channel subject to an annual cap of $50,000 per license, DiMA said. Webcasters have claimed the CRB’s 2 March decision would raise payments by as much as 1200 percent.

For its part, DiMA and its members agreed to revamp their statutory royalty reporting schemes to enable all webcasters to report uniformly so that royalties can be distributed more efficiently and accurately. Webcasters also said they would investigate the prevalence of “stream-ripping” – where Internet radio users turn performances into digital music libraries – as well as potential technologies record companies or webcasters might use to limit or end the activity.

SoundExchange expects large commercial webcasters such as Yahoo! and AOL to pay the new rates beginning 15 July, Executive Director John Simson said. The organisation has been talking with small and non-commercial webcasters about royalty rates and would continue to do so

See this full article at

Webcasters Close in On Royalty Settlement

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