Mike Carreon - Internet Radio Royalties

Today in class, I will be discussing Internet radio royalty policies and how the current standards have used previous legislation as a template. First I will take you though to the initial legislation regarding sound recording that was arranged because increases in technology demanded a means of protection of phonorecord piracy. With this, it set up an ideology of protection through copyrights. Although composition artists were dealt their royalties it wasn’t until the 1990’s that members of the sound recording side of the industry started to receive theirs. SoundExchange, a Performance Right Organization, was involved in the development and advocacy of the sound recording side of the industry. Coming closer to us in the timeline, we will see the Webcaster Settlement Acts come through due to the intensified royalty systems that the two acts passed in the ‘90’s had set into place. The royalties required had become outrageous, ranging from 80% to over 100% of the revenue a company was generating. Yes! I said it…over 100% of a company’s revenue was asked as of what the acts demanded for royalties. The Webcaster Settlement Acts took place in order to lock down prices over a period of time that were agreeable and fiscally responsible for both parties. Although they are “temporary” and considered “discounted” prices, they are still in the range of 50% to 75% of some companies’ revenues. The Pureplay Agreement definitely contributed to the, so far, success of the Webcaster Settlement Acts. It separates the royalty rates for the different potential webcasters: small, commercial, & subscription based webcasters. Making it maintainable for companies to survive despite the annual increase the Webcaster Agreement Acts call for. Since the Webcaster Agreement Acts were only through 2010, there is current negotiation for royalty rates, so if rates aren’t agreed upon we may see an end to internet radio.