A favorable ruling by the federal Copyright Royalty Board should have most commercial radio broadcasters happy that they’ll be paying lower streaming rates. But it is too early to say if more broadcasters will begin streaming and whether broadcasters will more easily turn a profit from the enterprise, according to attorney Kevin M. Goldberg with Fletcher, Heald & Hildreth, who has followed the CRB proceedings and writes often about copyright and trademark matters.
The three-judge panel on Wednesday issued their determination of royalty rates and terms that apply beginning on Jan. 1, 2016. The rate for commercial nonsubscription services in 2016 is $0.0017 per-performance, or 17 cents per 100 songs. That is the rate many radio stations will pay for online simulcasting, and is down from the current rate of 25 cents for every 100 songs played.
“That’s a savings of about 33% from last year. To quantify this in another way, that is an annual savings of about $84 per listener, if that listener were attached to the stream 24/7/365 and the station played 12 songs per hour. A station that has an average of 50 listeners at all times could expect to save about $4,200 over the course of the year; a station with an average of 100 listeners at all times would save $8,400,” attorney Kevin M. Goldberg with Fletcher, Heald & Hildreth tells Radio World.
Goldberg, who specializes in First Amendment and intellectual property issues, says the full extent of the ruling will not be known until the CRB’s written determination is released to the public soon.
“I am interested in reading the underlying decision. I don’t think this will result in more broadcasters streaming music, though. In a way, I can see fewer streaming because it’s not yet clear to me what is going to happen to the small broadcaster status that many broadcasters relied on in past years to avoid the real work of filing monthly Reports of Use.
“If that category has been eliminated, you might see some smaller broadcasters stop streaming, as those broadcasters probably won’t see the benefit of the lower rates but would have more work to do,” Goldberg says.
And despite lower streaming fees, Goldberg says he can’t be sure streaming will ever be profitable for radio broadcasters.
“Basic finance would say yes, since expenses will be less, but I consistently hear from clients who claim they make no money from streaming. It’s clear that the revenues are minuscule for most smaller broadcasters.”
Pure music streamers like Pandora and iHeartMedia also will pay the same $0.0017 per-performance, or 17 cents per 100 songs. CRB did not finalize rates for the period 2017 through 2020 but said they will be adjusted based on changes in the Consumer Price Index.
