Public Radio Stations Rally Against Online Royalty Rate Hike

Two of the largest public radio stations, NPR and KCRW, are rallying against a major streaming radio royalty rate increase, issued by the Copyright Royalty Board earlier this month.

The updated rate structure, which replaces revenue-based percentage calculations with flat, per-play fees, is widely viewed as the Death Blow for small and midsize web radio stations. And larger webcasters will face incredibly elevated royalties, and potentially scaled-down services as a result.

In response to the changes, NPR is now filing a petition for reconsideration with the CRB, a move that follows earlier protests from a range of other broadcasters. NPR pointed to a royalty structure that is “at least 20 times more than what stations have paid in the past,” a sentiment that was echoed by member station KCRW. “The CRB decision is truly egregious in that it treats successful non-commercial online music webcasters as if they were commercial stations,” said KCRW general manager Ruth Seymour in a statement issued Thursday. “We support NPR’s plans for a reconsideration of the CRB decision.”

For stations like KCRW, an onerous royalty rate structure could threaten a programming culture that focuses on new artists. “KCRW has promoted many independent artists and introduced new musicians on-air and online,” the station statement continued. “We therefore support reasonable royalty payments that rightly reward both artists and labels and hope that we will be able to reach an accommodation for public stations online and for other non-commercial webcasters, as well.”

The two public radio stations could become champions against the CRB hikes, though the public radio giants are mostly concerned with protecting their non-commercial interests. “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,” the NPR statement asserted.

The Future: What is totally ironic is that the philosophy behind the CRB’s rate increase is the polar opposite of the recent Payola Settlements. Small web radio stations champion obscure or unknown artists/genres that rarely if ever get played on terrestrial radio. For the CRB to target these entities is the flip side of the FCC who included this stipulation as part of their payola settlement with Clear Channel, CBS, Citadel, and Entercom: “The settlement between the government and the four broadcasters was reached in conjunction with a separate deal to grant more airtime for smaller record companies and their lesser-known artists as well as local musicians.”

Author: FutureMusic

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