• June 24, 2024

New Royalty Agreement for Online Radio Stations

After a two-year battle between online radio and copyright owners, a group representing artists and record labels reached a royalty-fee agreement with music websites, reports The Wall Street Journal . The new agreement, announced by non-profit organization SoundExchange, states that Internet radio broadcasters can have the option to pay on a revenue-sharing basis in return for more comprehensive reporting about the sound recordings than what is currently required. An Internet radio service like Pandora, for example, will have to shell out either a per-performance amount per song or 25% of total revenue.

The new agreement refers to online music streamed between 2006 and 2015 and requires all stations to come up with the cash to pay an annual minimum fee of $25,000. The stations are allowed to apply this amount to their royalty payments. Although this is a big step for copyright owners, according to The Wall Street Journal , the new royalty rates are weak in comparison to terrestrial radio, where 3.5% of revenues were handed over to the American Society of Composers. Still, in an interview with the Journal Chief Executive for Goom Radio, Rob Williams said the agreement is a “step in a fair direction.”

Williams predicts that the new royalty rates for online radio station companies will continue to go down as more people tune in. “It shows people are looking at the online radio business,” he said. “It’s just a matter of time before people stop saying terrestrial radio and online radio. It will be considered professionally delivered content. It’s the birth of a whole new industry.”