Are You Willing to Pay for Web Radio?
Posted Mon Mar 12, 2007, 9:37 AM ET
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A new royalty structure approved by the federal Copyright Royalty Board has webcasters quaking. Formerly they paid the music industry's SoundExchange between 6 and 12 percent of their revenue. But under the new royalty structure, they'll pay $0.0008 to stream one song to one listener, rising to $0.0019 in 2010. That may not sound like much, but it would amount to 1.28 cents per listener per hour, more than estimated current ad revenue of 1.1 to 1.2 pennies per hour. And that's just for starters. Rates would continue to rise every year. More bad news for small webcasters: There would also be a minimum charge of $500 per year per channel. And the new rules don't apply to songwriter publishing royalties, potentially an additional expense. Whether all this will kill web radio as widely predicted remains to be seen. But the fledgling medium will certainly have to find a more lucrative business model if it wants to survive. So, a speculative question: Just how much would you be willing to pay for Internet radio?
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