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Web Broadcasters Plan Protests Over Music Royalty Payments

CNBC.com
Monday, 25 Jun 2007 | 12:53 PM ET

Some fans of Internet radio may click on their favorite Web site and hear nothing but silence on Tuesday.

Web broadcasters are planning to turn off their music for the day in protest of higher statutory royalty rates for recording artists. Those participating in the event include Live 365, Pandora Media and Yahoo's Yahoo Music.

Internet Radio Fight
Dozens of internet radio sites are declaring a day of silence tomorrow, with CNBC's Julia Boorstin

"The arbitrary and drastic rate increases set by the Copyright Royalty Board on March 2nd threaten the very livelihood of thousands of webcasters and their millions of listeners throughout the country," said Jake Ward, a spokesperson for the SaveNetRadio coalition, which is helping to organize the protest, in a written statement.

It still remains to be seen if some of the larger Internet broadcasters will participate in the demonstration. According to The Wall Street Journal, Time Warner's AOL doesn't plan on participating, and Clear Channel Communications says it hasn't yet decided whether it would.

Silence may mean different things to different broadcasts. Some may opt to shut off their streams entirely, while others may replace the music portion of their programming with long periods of silence, static or a similar noise.

Some online broadcasters say the new rate structure, which will cost several times more than their current total revenue, will put them out of business.

The new rates were announced in March. They start at 0.08 cent per song, per play, per listener, and rise to 0.19 cent by 2010. The fees will be charged retroactively starting in 2006, and will be due on July 15.

SoundExchange, the organization that collects the fees, has proposed some relief for smaller Webcasters, but the industry has rejected that proposal, saying it would discourage growth.

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