NPR Takes First Step To Reverse Internet Royalty Rate Decision
March 15, 2007

After the Copyright Royalty Board (CRB) decided to drastically increase the royalties paid to musicians and record labels for streaming songs online, National Public Radio (NPR) will begin fighting the decision on Friday, March 16 by filing a petition for reconsideration with the CRB panel. The suggested new rates would increase to $.0008 per-play for 2006 (retroactively), $.0011 for 2007, $.0014 in 2008, $.0018 in 2009 and $.0019 for 2010, which could put some Internet broadcasters out of business and force public radio stations to quit streaming online.

"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," said NPR's VP of Communications Andi Sporkin. "Public radio’s agreements on royalties with all such organizations, including the RIAA, have always taken into account our public service mission and non-profit status. These new rates, at least 20 times more than what stations have paid in the past, treat us as if we were commercial radio – although by its nature, public radio cannot increase revenue from more listeners or more content, the factors that set this new rate. Also, we are being required to pay an internet royalty fee that is vastly more expensive than what we pay for over-the-air use of music, although for a fraction of the over-the-air audience."

Public radio station WXPN/Philadelphia sent out an e-mail to its members explaining that, "With three distinct streams of our own (WXPN, Y-Rock On XPN, XPoNential Music), XPN is doing all we can to ensure that the fees our public radio colleagues and we pay for playing music over the Internet remain fair to both the stations and the performers. By our estimates, WXPN could be paying about $1 million a year in royalties under the CRB's ruling. That could mean the end of streaming."

There also has been a Web site set up, SaveTheStream.org, where supporters can sign a petition to Congress asking them to help the Internet radio industry, and also leave comments about why Internet radio is important and how listening to it affects their music purchasing habits. The site also includes press coverage and FAQs about the issue.

Sporkin concluded, "This decision penalizes public radio stations for fulfilling their mandate, it penalizes emerging and non-mainstream musical artists who have always relied on public radio for visibility and ultimately it penalizes the American public, whose local station memberships and taxes will be necessary to cover the millions of dollars that will now be required as payment. On behalf of the public radio system, NPR will pursue all possible action to reverse this decision, which threatens to severely reduce local stations’ public service and limit the reach of the entire music community. NPR will begin on Friday, March 16 by filing a petition for reconsideration with the CRB panel, the first step in this process. We ask that the online royalties be returned to their historic arrangement and that public radio can continue to provide its vital service to music discovery.”




 
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