CRB Ruling Is “Crushingly Bad News” for Microcasters
The author is founder of
Wednesday, Dec. 16,
2015, brought good news for Pandora and other large Internet broadcasters.
Unfortunately it brought crushingly bad news for smaller broadcasters.
The Internet has been one of the last level-playing fields
left for small, mom and pop or “hobbyist” type webcasters. That level playing
field no longer exists for these very small webcasters and I’ve watched them
close their stations by the hundreds over the last two weeks.
I’m talking about watching disabled vets shut down their
stations. Retirees on small pensions, those on disabilities, others visually
handicapped, as well as ordinary working men and women who just want to play a
few songs over the Internet for their friends, young men and women with a dream
to eventually broadcast over the radio, so many of these webcasters are gone
now. It happened almost overnight.
I’ve also seen the
entire Internet economy affected as stream hosting providers laid off employees
and shut down servers as their clientele faded away. Fairly large providers are
struggling to survive while some smaller, and to this point very stable
providers, may not be able to continue.
operators saw their dreams evaporate into nothingness the day the Copyright
Royalty Board published its long awaited webcasting rates for 2016–2020 on
16. The problem arises from the expiration of various “small”
or “microcaster” categories that had existed through 2015 and offered a much
more manageable rate structure for a hobbyist who wasn’t generating revenue.
When the various groups presented their cases to the CRB, no one represented
the needs of these small or micro webcasters. As a practical matter, smaller
webcasters should have participated. However, if they had the funding necessary
to bring adequate representation to the table, they would very likely not need
the provisions so necessary now for their continued existence.
Historically, these categories made a way for certain
webcasters, from “hobbyist” to business startup hopefuls, to transmit legally.
Under these expired categories, fair performance fees were paid to artists
while still making webcasting affordable for the little guy.
Without going into all the math and variants available under the new
ruling, let me illustrate what has happened. In the past, the small webcaster paid
a reasonable percentage of the greater of profits or expenses. This ensured
that payment was made, but limited it to amounts even a hobby webcaster could
afford. Today, that same webcaster has fewer realistic options; it will likely
have to take measures to limit listenership in some way, engage in direct
licensing, operate under a legitimate 501C non-profit entity, or pay .0017 per
performance (with a performance equal to one listener hearing one song).
While .0017 per performance is a big win for larger webcasters
and FCC-licensed broadcasters, it is totally devastating to microcasters. For
example a very small webcaster, playing 12 songs per hour, with only 20
listeners tuned in each hour, would owe over $3,500 to SoundExchange alone.
This same webcaster must still take care of its obligations to ASCAP, BMI and
SESAC. Obtaining advertising for smaller stations is difficult and when
obtained, it very rarely covers even 10% of the numbers we are talking about
Thus, due to the loss of the small commercial
webcaster and microcaster categories, much of the vitality of Internet Radio is
StreamLicensing is one of the aggregators making
licensing affordable and relatively doable for small webcasters. Our nearly 1,300
broadcasters have a real passion for the music they play. They have a lot of
passion for the music but are too small to earn income sufficient to offset
these rates. While these small webcasters support recording artists and want
those artists (and composers) to receive recompense for their work, these same,
very small online radio stations cannot pay the fees that are now required.
This means one of the last level playing fields left for the
small, mom and pop webcaster is no longer available. Please join with us in
seeking the restoration of the small webcaster categories as administered by
LLC provides blanket royalty and performance fee coverage and reporting for
small webcasters who play music from the ASCAP, BMI, SESAC, SoundExchange and
SOCAN catalogs. Marvin Glass worked in college and small-market radio and TV in
the 1970s and came full circle years later when he purchased a 1 kW AM station
in 2005. He later started All Southern Gospel Radio,
an Internet-only radio station, and founded StreamLicensing