The Harvard Crimson has an article about the effect of the new SoundExchange royalty rates on college radio, at Harvard and throughout the US. From the Crimson:
Internet radio’s low overhead allows for stations to broadcast on a shoestring budget and still access a worldwide audience. For some college stations that only have small transmitters or broadcast in small communities, streaming actually becomes the main source for listeners.
The newest SoundExchange royalty rates are so dangerous to internet radio because they effectively eliminate both of these advantages to streaming. Not only will royalties see a 150 percent increase over the next five years, but a $500 fee per channel will also be introduced.
If stations want to increase their listener capacity on one channel above 200 listeners, they will be forced to pay more for each accrued listening hour. Finally, since the settlement was supposed to have taken effect in 2007, stations are already in the position of having to retroactively pay the missed fines to SoundExchange within 90 days of receiving notice, which may again be during summer hours when stations are not operating at full capacity.
These prohibitive costs will force internet radio towards the current commercial model of terrestrial radio. College radio stations and other small stations will undoubtedly find the cost to be too high, forcing them to either stop streaming, increase advertisements, or negotiate directly with the RIAA for different terms, lengthening the already lengthy legal battle.
With SoundExchange holding all the cards, internet radio may quickly find itself being bullied into a model the recording lobby finds most profitable
Sad. —MEGHANN MARCO