01 Nov Weighing Internet Radio Royalty Options
Music royalty bills don’t address problem; Pending legislation won’t fix 1998’s antiquated DMCA
By ANDREW BARKER
Nothing involving digital music is ever clear-cut, and things tend to become especially sticky when the federal government gets involved. Yet the coming conflict facing Congress over Internet radio royalty rates looks to be as knotted as any in recent memory, as the ability of long-standing copyright laws to accommodate the ever-changing biz is stretched ever further.
The most pressing issue concerns the wildly divergent royalty rates paid by various radio platforms. At present, terrestrial radio stations pay no performance royalties to artists. Cable and satellite radio pay a statutory fee, which for Sirius XM amounted to around 7.5% of its annual revenue last year. And Internet radio provider Pandora pays well over 50% of its revenue in royalties; in documents it filed with the SEC before going public last year, the company starkly noted that it may never be capable of turning a profit until these rate demands are altered.