Radio stations hit hard in copyright ruling
National Assn. of Broadcasters to appeal
Historically, broadcasters have been exempt from having to pay royalty fees to recording labels and performers for music transmitted over the airwaves. For months, they have argued that this same exemption should cover transmissions over the Internet.
In its Friday ruling, the copyright office decided otherwise, treating radio stations just like any other Webcaster playing music on the Internet.
The ruling could generate millions of dollars in new revenue for record companies and performers. Exact fee schedules are to be determined by an independent panel. Of the nation's 13,000 radio stations, an estimated 4,000 have begun transmitting on the Internet.
"We are gratified that the U.S. Copyright Office agreed with our position," Recording Industry Assn. of America prexy Hilary Rosen said.
The National Assn. of Broadcasters blasted the decision, saying it would fight the action in federal court.
"Broadcasters currently pay hundreds of millions of dollars annually to the licensing societies representing the authors, composers and publishers, and have never been required to pay additional fees to the record companies and authors," NAB prexy-CEO Edward O. Fritts said.
Royalties already paid by broadcasters are known as public-performance fees. Under the new scheme, radio stations streaming on the Internet would also be required to pay what are known as sound-recording fees. Since 1996, federal law has required all other Webcasters to pay sound-recording royalties.
Earlier in the fall, a broad-based consortium of recording industry heavies launched SoundExchange, a service to compensate labels and artists for digital performances of their songs via Webcast, as well as on cable- and satellite-based radio services.
SoundExchange will be run by a committee consisting of the RIAA, the Assn. for Independent Music, the American Federation of Musicians, the American Federation of Television & Radio Artists, execs from the five major labels and several musicians, including Net-savvy songsmith Aimee Mann and jazz fusion great David Sanborn.
