Those who hit up Last.fm for their streaming music needs may soon have to pay for the privilege.
When SoundExchange, the organization that represents many labels and artists, proposed steep new royalty rates for radio webcasters last year, they shortsightedly killed off their own revenue stream. Instead of their proposed rates being cut back as part of a standard negotiation, they were surprised to see the U.S. Copyright Royalty Board reject opposing arguments and adopt SoundExchange’s rates fully. Now Pandora, the popular streaming music site, says it’s paying over 70% of its revenue in royalties, and unless Washington changes the rates soon—which looks unlikely— they will have to shut down.
“This is a stunning, damaging decision for public radio and its commitment to music discovery and education, which has been part of our tradition for more than half a century. Public radio’s agreements on royalties with all such organizations, including the RIAA, have always taken into account our public service mission and non-profit status. These new rates, at least 20 times more than what stations have paid in the past, treat us as if we were commercial radio – although by its nature, public radio cannot increase revenue from more listeners or more content, the factors that set this new rate. Also, we are being required to pay an internet royalty fee that is vastly more expensive than what we pay for over-the-air use of music, although for a fraction of the over-the-air audience.
Keep reading it gets meaner…