Wednesday, December 12, 2012 - 12:10pm
We've heard (at the recent House Subcommittee hearing on the Internet Radio Fairness Act for one, but elsewhere too, and often) the recording industry:
- doesn't like the amount of royalties streaming services pay to play copyright recordings, and wants more;
- really doesn't like that U.S. broadcasters don't pay at all; but should, like the good folks of the non-U.S. broadcast world.
So, how much does, say, a UK radio broadcaster pay to play a copyright sound recording per listener, and how does that compare to other services, like Spotify or Pandora?
Enter David Touve (you may remember him as the Washington and Lee University Assistant Professor of Business Administration who estimated that U.S. broadcasters would owe the recording industry $2.5 billion a year if they were required to pay at the webcasting rate here).
Using data from PPL (which collects royalties from UK radio) and RAJAR (which measures listening), and estimating 12 songs per hour, Touve estimates "the value of a single radio play to a single listener in the UK for only that portion of the royalties that are paid to record labels, featured artists, and performing artists" is £0.000073, or $0.00012.
"For comparison, I believe the value estimated above is 1/36th the rate reported by Zoe Keating ($0.0042) [Touve's referring to this] for her receipts from streaming music services (e.g., Spotify), 1/10th the rate ($0.0011) paid by Pureplay Webcasters in the U.S. (e.g., Pandora), and 1/18th the CRB-established default Webcaster rate ($0.0021) in the U.S."
Put another way: Pandora currently -- under the settlement "discount" rate -- pays at a rate ten times what UK radio pays to perform sound recordings.
(The difference in audience size between Pandora and the broadcast industry of a country like the UK, much less the U.S., naturally means the recording industry's take from broadcasters will be much larger. But what Touve is putting in high relief is the discrepancy between the rates.)
Read Touve's latest Rockonomics blog entry here.