Frantic webcasters across the net are trying to combat the
recent development in webcast regulations that would require small,
independent Internet radio stations to pay record labels two to
three times their gross revenue, writes Kurt Hason publisher of
RAIN the Radio and Internet Newsletter
In October 1998, Congress passed the 'Digital Millennium Copyright Act (DMCA)' 'which, among other things, granted record companies the right to collect royalties when their copyrighted works were played via digital media (including Internet radio and satellite radio).' This is a departure from traditional radio stations which pay approximately 3 percent of their revenues to music composers - not record labels. The logic behind the shift in royalty payouts was that the digital broadcasts would be of such quality that they would diminish CD sales.
When the DMCA passed, record companies asked for 15 percent of revenues whereas webcasters argued for 3 percent. Since the two groups couldn't come to terms, the U.S. Copyright Office, in 2001, 'established a 'Copyright Arbitration Royalty Panel (CARP)' -- a panel of three arbitrators to resolve the issue.' This particular CARP held six months of hearings last year and came up with a royalty rate of 14 cents per song per listener. So, a station that has 1000 listeners would have to pay $21 per each hour they broadcast music. Plus, the decision would be retroactive to the 1998 decision. Which would mean that the 1000-listener station would owe $525,600 which would have to be paid in full within 45 days of the decision. Currently the only stations that could handle such a fee are the huge ones that are already supported by advertising. And the amount is way more than the original demands of the record industry.
So what is one to do? Write your elected representatives, get informed and write the Copyright Office at the Library of Congress. See the links below, and spread the word.
--Sara V. Buckwitz