CARP, the Copyright Arbitration Royalty Panel, which is the body appointed to recommend a copyright royalty rate for music streamed on the Internet, has finally released their conclusions. These rates, if adopted by the Copyright Office, will be what webcasters will have to pay (according to the Statuatory License) to record labels to use their music.

The table below was taken from the U.S. Copyright Office site here, and lists the basic fees. Unfortunately, there is very little by way of explanation of the terms. Look for that in the second part of the CARP findings (RAIN hears that the "Schedule B" release will come on Monday).

It appears that commercial braodcasters, to stream their over-the-air signal on the Internet, will pay a royalty at about half the rate (0.07 cents) of an Internet "pure-play" webcaster (0.14 cents). In other words, Spinner.com will pay at double the rate of WLUP-FM/Chicago. But the table leads to some confusion here: To what does entry 1.(a) refer? We're unclear as well as to what "Business Establishment Service" is.

Note that "per performance" means "per song/per listener." In other words, every time one person hears one song, that's a performance. If twelve people listen to your webcast of twelve songs, that's 144 performances (we'll do some more math later).

"Ephemeral" recordings, you may remember, are backup or "cached" copies of the same song (used to facilitate streaming, etc.). We're assuming this nine percent pays for the right to use them.

Note the minimum fee per license has been set at $500.

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Reprinted from earlier...


BY PAUL MALONEY
Yesterday we reported (here) that the U.S. Copyright Office recently enumerated the requirements for reports webcasters must file with copyright holders to legally use their music online. And in doing so, many broadcasters hold the position that the government formed their ruling based simply on the record industry's requests.

The ruling itself can be found here (in a simple text format) and here (in Adobe Acrobat format). RadioHorizon.com has a concise list of the requirements. According to the ruling, webcasters will be required to report to the primary performance copyright holder (usually the record company) -- for each and every song -- the following information:

In addition, webcasters are to report information (a "listeners log") on the audience for their transmissions as well:

The Copyright Office holds, based upon RIAA testimony, that these requirements aren't at all unreasonable -- and that in fact, many webcasters already follow these guidelines. And yet, as of publication, no word from the NAB nor DiMA.

Look for RAIN reader feedback below, and more analysis, and further developments on this story coming soon in RAIN.

...

... Should these requirements survive legal appeal, it's not an overstatement to say that this may signal the death of webcasting (independent of the major labels, of course). It's a precarious, unproven industry as it is. We've documented in this newsletter over and over the difficulties faced by webcasters in dealing with bandwidth and technology costs, advertiser apathy in an already poor economy, listener acquisition costs, the AFTRA affair, and the uncertainty of music copyright royalty fees. We've lost count of the webcasters that have already called it quits for these reasons and more. Yet there are still some independent webcasters who've managed (and deserved) to make it this far by way of prudent business practices and quality products. And there has been some light at the end of the tunnel (in the area of growing consumer adoption of Internet radio, increased advertising interest, etc.) It now seems that webcasters will have to make it mandatory for listeners to supply some information in order to listen (the ability to "opt-out," or listen without providing any info, will be eliminated), since accurately gathering this information through technological (tracing streaming routes, etc.) means is probably unfeasible. We believe that requiring webcasters to report all this information (the value of which is dubious, to say the least) for each song and each listener will prove to be so burdensome and expensive that even those survivors will be left with no choice but to abandon the industry. Perhaps this is ridiculous, but if all this information is so necessary for the RIAA, why don't they collect it on sales? How unreasonable and costly would it be if the record industry required retailers, for each sale, to find out exactly where the listener will listen to the CD, to which tracks, when they plan on listening, and who else will be hearing the recording? By the way, while the RIAA was whispering into the Copyright Office's "ear" and getting this filing passed, where was broadcasters' representation (NAB, DiMA, Congressman Boucher)? How will the industry respond to this? What do you plan on doing? -- PM ...