Higher Royalties Could Force Radio Stations to Pull Plug on Webcasts
By George C. Ford, The Gazette, Cedar Rapids, Iowa
Mar. 27–Eastern Iowans who listen to KCCK-FM and other radio stations over the Internet may have to go back to finding them with an antenna if a proposed royalty fee increase takes effect early next year.
On March 1, the federal Copyright Royalty Board proposed a significant increase in the royalties paid to musicians and record labels for streaming digital songs online. The fees would be retroactive to January 2006, and the more people a radio station reaches online, the more it will pay.
The royalty fee has been 0.0008 cents each time a song is played. The Copyright Royalty Board has plans to more than double that fee to 0.0019 cents by 2010.
After facing outrage from the broadcast industry, the board last week agreed to review its decision.
While the per-song fee seems small, it will add up to $350,000 for 2006 and 2007 for at least one public radio station, KCRW in Santa Monica, Calif.
Dennis Green, general manager of KCCK-FM (88.3) on the Kirkwood Community College campus, says such a dramatic royalty fee increase could lead to pulling the plug on online listeners.
“Our online broadcasting is just a public service,” Green said. “We do not generate any revenue from it. It is mainly for the benefit of listeners in our area who work in buildings and are not able to get good radio reception.”
Non-commercial stations like KCCK and KSUI-FM (91.7) in Iowa City are charged a lower royalty fee per song than commercial stations. That fee jumps to the commercial rate when the number of online listeners tops 159,140 aggregate tuning hours (hours broadcast multiplied by number of Web listeners) in a month.
Green said buying the software to determine the size of KCCK’s online audience and dedicating an employee’s time to record keeping could be cost-prohibitive.
“We will look at how onerous the measurement issues are going to be and I think they could be very onerous and look at how we can stay within the non-commercial framework,” he said. “We could be looking at a fairly decent bill for 2006. If that bill comes due, I honestly do not know what we will do.”
At KMRY-AM (1450) in Cedar Rapids, owner Rick Sellers said cost and record-keeping requirements prompted the station two years ago October to pull the plug on online listeners.
“You have to keep records of everything you play two weeks out of every six weeks,” Sellers said. “We said, ‘No, we’re not going to do it.’
“I have the money to pay the royalty fees, but I’d rather spend it on things for our listeners in Eastern Iowa rather than someone in Boston or Washington.”
For KMRY, the Internet offered listeners a way to hear sports broadcasts after the station reduces its transmitting power at sundown each evening.
“When we broadcast Xavier High School football and basketball games in the evening, our signal stops at about Mount Vernon Road,” Sellers said. “When listeners complained that they couldn’t pick up the games, I told them to go to the Web. Not anymore.”
Eliot Keller, general manager at KZIA-FM (102.9), said the proposed royalty fees have generated opposition in the broadcast industry.
“It clearly adds additional burdens to provide Internet streaming,” Keller said. “Each station must decide whether it makes sense to continue doing it.”
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Copyright (c) 2007, The Gazette, Cedar Rapids, Iowa
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