New Royalty Rates For Satellite Barely Budge

While online radio battles publicly for lower performance royalties lately, satellite radio learned on friday that their rates would increase slightly, but remain remarkably lower than those paid by streaming services. All of these royalty payments are paid to SoundExchange. Beginning in 2013, satellite radio will pay 9% of its revenues to SoundExchange, a 1% increase over this year. The rate will increase by .5% each year after that until 2017. crb-logo-owl

Webcasters like Pandora meanwhile pay approximately 50% of their revenues to SoundExchange, and attempts to lower that fee have been met with fierce condemnation by record companies and artists. The Internet Radio Fairness Act calls for lower rates for streaming that would be closer to those of satellite radio. Broadcast radio in the US does not have a performance royalty obligation.

This announcement that the Copyright Royalty Board has reviewed all the information and chosen to maintain low percentage of revenue royalties for satellite ratio can only help to validate the argument that streaming royalty rates for webcasters are unfairly high. While I won’t pretend to understand all of the ins and outs of the legal case that was presented at the CRB hearing on this matter, I think I do know enough about the lay of the land to be concerned about the future of Internet radio. It would certainly appear that record labels, and possibly even the CRB have set it sights on the industry, arguing fiercely for much higher rates than other technologies pay, and refusing to budge in negotiations. Now this has been validated by a government agency, meaning this was no mistake…

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