NAB tells the Copyright Royalty Board it should start from scratch in setting license fees that radio stations pay to stream their programming.
More accurate rates that would be agreed upon by a willing buyer and willing seller in a competitive market would be better than the current rates, the broadcast lobby says in a filing submitted to the CRB.
Previous license rates that stem from 2007 were based on flawed evidence and analysis of a noncompetitive market and should not be factored into the new rates set by the CRB, NAB said. Those 2007 rates wrongly used the licenses granted by major record labels to interactive on-demand streaming services to set the licensing rates for nonsubscription, advertiser-supported services such as radio stations’ online streaming, according to NAB.
“Of the seven streaming services the CRB used in setting licensing fees rates for radio, only one service has not failed. This is evidence that the existing rate structure is too high to allow broadcasters to achieve a return on streaming,” said NAB.
Most broadcasters don’t make money on streaming, according to the broadcast lobby. “Some have reached a business decision to limit their streaming or not to stream at all, despite the potential to expand their listening audience. For all of these reasons, a significant rate reset is necessary so that streaming can be a viable business that will allow broadcasters to provide streaming services to the audiences that rely on them and benefit from them.”
NAB urged the CRB to factor in broadcasters’ services to their listeners as well as record labels and artists when setting streaming rates and to take into account a radio station’s size and market in adopting new streaming rates.