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GUEST: Paul Maloney, Editor of Radio and Internet Newsletter

On Tuesday June 26th, over 14,000 internet radio webcasters participated in a National Day of Silence to draw attention to pending royalty rate hikes. Webstreams were silenced throughout the day including major webcasters such as Yahoo, Pandora, and Rhapsody. The action was intended to illustrate what the webcasters forsee is their potential fate. On July 15th, new regulations mandated by the Copyright Royalty Board will go into effect, increasing royalty fees through 2010 as well as demanding retroactive royalties at higher rates for 2006. Under the new regulations, major webcasters would be required to pay a $500 minimum fee per station or channel. Internet webcasters say that the new rates could effectively end internet radio as we know it today. Seeking to address webcaster’s fears, SoundExchange, an organization that collects royalties for record companies, has offered a compromise solution. Under SoundExchange’s proposal, royalty hikes would be capped at $2,500 per service through 2008. However, in a statement released by the executive director of the Digital Media Association, the offered compromise is little more than a “stay of execution for internet radio.”

For more information, visit www.kurthanson.com, or www.savenetradio.org