In March, the Copyright Royalty Board—the federal government panel that regulates copyright royalty rates—released a ruling that sparked glum and urgent messages across blogs and internet radio news sites. The decision slapped internet broadcasters with a hefty royalty increase, an increase that exceeded the stations' often-paltry incomes, and threatened to quietly choke many smaller and emerging broadcasters—including many in Portland.
After a downpour of outcries by small webcasters and their allies—including some members of Congress, like Senator Ron Wyden—SoundExchange (the agency responsible for collecting royalties) agreed to modify small nonprofit broadcasters' rates. In a press release, SoundExchange Executive Director John Simson said, "There's a sense in the music community and in Congress that small webcasters need more time to develop their businesses."
Does this new decision mean Portland's small broadcasters are saved?
Essentially, SoundExchange's decision requires music-oriented webcasters to pay a $500 flat fee in addition to a per-listener royalty if the station exceeds 200 simultaneous listeners.
Bruce Fife, president of the local chapter of the American Federation of Musicians, says that while he finds SoundExchange's decision reasonable, mid-sized webcasters—such as Pandora Radio and Live365—will still feel the pinch. Stations of this size are past the 200-listener mark, but might not have the income that larger operations do.
Portland Radio Authority (PRA), a plucky internet-based radio station, could still have trouble expanding its operation despite the lowered rates, according to PRA Station Manager Jeff Simmons.
Simmons has been steadily trying to expand PRA's listener base by encouraging DJs to reach out to their respective communities to find new listeners. He has also been trying to use station connections outside of Portland to give PRA a national—and eventually, international—scope.
However, Simmons' efforts to develop PRA's operation could prove to be problematic if the station's listenership routinely grows beyond 200 simultaneous listeners, which will trigger the royalty fees. "It doesn't allow us to grow," says Simmons.
Simmons agrees with the assessment that mid-sized stations (which PRA is on its way to becoming) will be hit the hardest by the royalties.
Presently, a bill sponsored by Senators Wyden and Sam Brownback (R-Kansas) that would lower rates for webcasters is kicking around the Senate. A similar bill is in the House.