A ruling by the US Copyright Royalty Board ( CRB ) forcing online radio stations to pay expensive royalty charges to play copyrighted music is likely to force a majority of stations to close down.
The CRB, the US equivalent of Phonographic Performance Limited ( PPL ), decides how artists and record companies should be paid when their music is played on the radio. Earlier this year, the CRB ruled that online radio stations must pay a royalty based on each time a song is played for listeners tuning in over the internet.
Yesterday, NRP's appeal was rejected and the CRB decided that online radio stations must pay a royalty based on the average listening hours each station has. After next year, radio stations will have to pay on a per-song, per-listener basis. It said that royalties must be collected by 15 May.
Currently, internet radio stations pay a set fee plus 12 per cent of any profit to the CRB. The new ruling is likely to affect smaller, independent internet radio stations that operate with tiny budgets.
A campaign to save internet radio was started immediately following the CRB ruling. It seems that it's a little too late however, as it looks like only big companies with big budgets will be able to afford to broadcast music over the internet.
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