On 20 June, the U.S. Librarian of Congress, James Billington, set royalty rates for online radio webcasters that are half the originally proposed fees. Under the new rates, a webcaster pays about a fourteenth of a cent per user for each song it plays live. Archived or simulcast streams will carry a rate of .02 cents each, and temporary copies liked ripped CDs will be licensed at the rate of 8.8% of the entire royalty fee. Even with the new lower rates, webcasters say they can’t afford to pay the royalty fees which far outstrip their revenues.
The worst part is that webcasters have 45 days to make complete royalty payments dating back to 1998.
Large webcasters like Live365 which streams 8.4 million hours per month will be required to pay monthly royalty fees on the order of US$200,000.
Predictably, the Recording Industry Association of America (RIAA) complained that the new rates are too low, saying that the decision forces artists and labels to subsidize the webcasters. The new rate “simply does not reflect the fair market value of the music as promised by the law,” said RIAA president Cary Sherman.
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