Local radio stations which stream content over the Internet could get hit hard by a proposal to dramatically increase royalty fees for web-distributed music.
The Copyright Royalty Board proposed major increases earlier this month in the royalty fees stations pay to broadcast content online. Stations had previously paid an annual fee and a percentage of profits to SoundExchange, a D.C.-based royalty collection agency. The new system would require a per-song fee plus an annual fee for each of the station’s channels – all retroactive to January 2006.
While the proposal would affect major companies such as Clear Channel, which owns eight stations in D.C., it would hit the college and public radio stations hardest, according to BIA Financial Network Inc. Vice President Mark Fratrik.
Fratrik said commercial stations could raise advertising fees to help pay costs, but public stations lack that option. Some college stations such as University of Maryland’s WMUC (88.1 FM) and Howard University’s WHUR (96.3 FM) stream content online may be too small to pay the fees.
Washington-based National Public Radio struck back at the ruling Monday, filing a motion to appeal the decision.
“These new rates inexplicably break with the longstanding tradition of recognizing public radio’s non-commercial, non-profit role,” the motion said.
Philadelphia-based public radio station WXPN, (90.5 FM in Baltimore), will pay large fees for its three Internet streams, assistant general manager Bruce Warren said.
“It’s going to be in the hundreds of thousands of dollars for us,” Warren said. “It’s something we hadn’t anticipated and didn’t expect.”
While WXPN likely will find a way to make up for costs if the hikes are approved, Warren said, other stations may eliminate Internet content entirely.
“We’re very concerned that this could mean the end of streaming for WTMD,” WTMD (89.7 FM) General Manager Stephen Yasko said.
WTMD can be heard in D.C. through its high-definition channel.
“This comes at the absolute worst time for WTMD, as we’re in the midst of planning a major expansion into Internet streaming,” he said.
WTMD might be forced to make streaming available for members-only, Yasko said.
“That would be a travesty and would reverse public radio’s public service mission”, he said.
Stations have until April 2 to file a motion with the board, which plans to rehear the decision.
