March 19, 2007
A Fee Per Song Can Ruin Us, Internet Radio Companies Say
By ROBERT LEVINE
New-media companies and record labels are feuding again. But this time, it is the digital companies that warn they may be driven out of business.
Several Internet radio companies are arguing that a recent decision by the Copyright Royalty Board, a three-member panel under the Library of Congress, would make it almost impossible for them to stay afloat.
Under the ruling released on March 2, Web broadcasters must pay each time a listener hears a song, at a rate that began at 0.08 cent in 2006 (the ruling applies retroactively) and rises to 0.19 cent in 2010. Besides increasing the charge for each song, the ruling established a $500 minimum payment for each Web channel — making it difficult for companies like RealNetworks and Pandora to offer as many different kinds of music as they do now.
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