The royalty rate for all radio stations is $0.0017 cents per song.
For internet radio stations, that
rate is then multiplied by how
many listeners are hearing the
station at the time. This means
the cost for internet radio stations becomes 17 cents per song
if 100 people were listening,
while AM/FM stations pay just
$0.0017 cents. For internet stations, the costs quickly add up.
If an Internet radio station had
an average of 100 listeners at
one time throughout the day
and played 10 songs per hour,
the cost per hour would be
$1.70 per hour. That’s $40.80
per day and over $1200 per
month.
For a large business $1200 a
month might be workable, but
many internet radio stations operate as hobbies by music fans.
These station owners are likely
former DJs, music writers, or music fans who want to introduce
NewJerseyStage.com
others to the artists they love.
Stations run as hobbies are free
to play whatever they want, often
broadcasting independent artists or niche genres. Even if the
stations made the jump from a
hobby to a business, the move
would be counter-productive because royalty rates increase if the
station actually earns revenue to
help pay for the royalties owed!
The royalty rate increase is due
to the expiration of the Webcaster Settlement Act of 2009. This
allowed online stations to base
their royalties on the amount of
revenue produced by the station.
In essence, this is the most logical way royalty rates should be
handled. Stations could be run
as a hobby as long as they paid
their share of music royalties. If
the station grew popular and
profitable to the point it could
be a viable business, the owner
would be paying higher royalties
based on higher revenue.
2016 - ISSUE 1
Table of Contents
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