Increased Streaming Radio Rates Face Stepped-Up Backlash

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The Copyright Royalty Board (CRB) has faced a torrent of protest following its issuance of increased streaming radio rates, first delivered in early March.

Now, a consortium of internet-based music and radio companies has stepped up its protest by asking the CRB to reconsider its ruling.  The group, represented by Washington, DC-based Digital Media Association (DiMA), first announced its intentions on Monday.  “We do not believe that the Copyright Royalty Board intended to shut down the vast majority of legitimate online radio services immediately when it issued its decision, yet that is the sober reality facing many services,” said group executive director Jonathan Potter.  The refreshed CRB rates replace a royalty calculation that is based on a percentage of overall revenues with a per-play fee.  Potter, like many others, fear that those charges will quickly exceed annual revenues at small and mid-size broadcasters.

Potter outlined three core changes that it hoped the CRB would consider.  The first request is a clarification of the $500 per station flat fee, a structure that could become incredibly expensive for services that dynamically generate thousands of stations based on user preferences.  Other models, including those popularized by Live365, allow individual users to create their own stations, an approach that results in a massive number of channels.  The second request is to allow stations to pay royalties “per tuning hour,” instead of per track played.  And the third request is for the CRB to consider opinions outside of those proposed by SoundExchange, accused of gearing an argument to maximize profits from non-interactive streaming providers.  “This gamesmanship by SoundExchange suggests that the Judges’ reliance on the SoundExchange’s expert to set internet radio royalties was erroneous, and should be reconsidered at this rehearing stage,” the statement asserted.  DiMA members include Apple, AOL, Mercora, Napster, RealNetworks, and YouTube.  The DiMA pushback follows a similar protest by both NPR and member station KCRW.