Rising Royalty Payments Kill Online Radio

Three retired Washington judges meet every five year under Digital Millennium Copyright Act to discuss how much the webcasters should pay the record industries for their artists’ songs. These payments are known as royalty payments.

The judges estimated royalty payments for the two coming years higher by 30 percent. Besides, the webcasters will need to pay $500 ‘administrative fee’ for every online radio channel. The decision was made immediately, without giving an idea about how the fees are being calculated. New fees are effective from July 15.

According to the newly estimated payments, major internet radios such as Yahoo, Pandora, RealNetworks will spend about $1.15 billion per year on administrative fee. This is a huge amount of money comparing to last year’s $20 million royalty payments collected by SoundExchange record label.

SoundExchange itself lowered royalty payments for small webcasters last year.

While online radio payments are raising, satellite radio broadcasters are paying only 7 percent of their revenue for royalty payments.

These royalty payment changes will definitely ‘kill’ online radio channels. None of the webcasters will be able to afford such huge fees for playing music online.

Judges are not yet going to change their decision, so the webcasters still don’t know if they’ll play online music this summer or not. The protest against high royalty payments hasn’t yet given a result. by Ruzan Harutyunyan for HULIQ.com