Copyright Royalty Board Denies Webcaster Rehearing Requests

  • Save

The US Copyright Royalty Board (CRB) has denied motions for a rehearing by internet radio broadcasters, according to documents issued Monday. The decision comes after the broadcasters protested a more expensive royalty schedule related to the use of master recordings. The new ruling will impose increased royalty fees that could potentially bankrupt most webcasters and destroy internet radio.

The three-judge panel explained that “the parties filed various responses per our request. Having reviewed all motions, responses to those motions, and written arguments, the Judges now deny all such motions.” The five-page document noted that internet broadcasters largely rehashed earlier arguments in their rehearing requests, or raised issues that could have been offered during earlier proceedings. “We find, however, that none of the moving parties have made a sufficient showing of new evidence or a clear error or manifest injustice that would warrant a rehearing.”

The denial follows an original ruling in early March of this year, and a subsequent order allowing motions for a rehearing on March 20th. Motions were filed by the Digital Media Association (DiMA), Intercollegiate Broadcasting System, Inc., Small Commercial Webcasters, National Public Radio (NPR), and various others.

The CRB’s decision was greeted enthusiastically by SoundExchange, which represents the interests of major recording labels and artists. “We are gratified that the CRB has upheld its decision,” said Michael Huppe, general counsel at SoundExchange. However, others promised a fight and rallied behind the banner of SaveNetRadio, a group committed to pushing back against the escalated rates. “The CRB’s ill-informed decision to increase royalty fees to this unjustifiable level will quite simply bankrupt most webcasters and destroy internet radio,” said SaveNetRadio spokesperson Jake Ward.

Meanwhile, the royalty board also refused to grant a stay on the payment of retroactive royalties until all legal appeals are exhausted, a decision that will generate a lump payment for a number of internet-based radio providers. “In just about one month from today … the Copyright Royalty Board expects internet radio stations to pay millions of dollars in retroactive royalties – and this will drive most stations out of business,” said Jonathan Potter, executive director of DiMA.

The new royalty rates will have a significant impact on the industry, and not just for internet radio broadcasters. In fact, many believe that the new rates will also impact streaming services and podcasters, who may also be subject to higher royalty fees. As a result, some believe that the CRB’s decision is not only bad for internet radio, but bad for the entire digital media industry.

The ruling has also sparked a debate about the fairness of the music industry in general. Many internet radio broadcasters argue that the new rates are unfair, as they disproportionately benefit major recording labels and artists at the expense of smaller internet radio stations and independent musicians. In response, some have called for a reform of the entire music industry, arguing that the current system is outdated and needs to be restructured to better support independent artists and small businesses.

Despite the pushback, it is unlikely that the CRB will change its decision. However, internet radio broadcasters and others in the digital media industry may still have other options for fighting the new royalty rates. For example, some have suggested taking legal action against the CRB or lobbying Congress to intervene. Others may look for alternative revenue streams or business models to sustain their operations in the face of increased royalties.

In any case, the new royalty rates will undoubtedly have a significant impact on the internet radio industry and the broader digital media landscape. As the industry continues to evolve and adapt to changing circumstances, it remains to be seen how internet radio broadcasters and others will respond to these new challenges.