The SaveNetRadio coalition is a response to the royalty increase in the March 2007 Copyright Royalty Board (CRB) ruling. The coalition consists of artists, labels, listeners, and webcasters that believe another solution must be created in order to prevent internet radio stations from shutting down. The CRB decision will harm millions of music listeners, performers who depend on the internet radio to increase their audience, and webcasters who make a living from streaming music online.
SaveNetRadio exposes the unreal myths and harsh facts about the cost of webcasting. While the internet radio is the smallest medium within the radio business, it pays the most royalties. Broadcast radio and satellite radio are subject to small or no royalties at all. The predicted combined revenue for internet radio services is $73.6 million, but 58% of that revenue will be used for royalty payments. Internet radio is one of the most important sources for music listeners. About seven million Americans a days use internet radio. Although the popularity of internet radio has increased tremendously, it is still a small, growing industry. Most webcasters do not generate enough revenue to cover the royalties since they do not have enough sponsors or advertisements to sustain them.
Another myth concerning royalty rates is that artists and record companies were not being fairly compensated for their work prior to the CRB decision. The reality is that if royalties are too high, internet radio will go out of business, and then performers definitely will not be paid for their work. The high royalties will not allow small or large webcasters to survive, and even if large webcasters can afford the royalties, it will not promote competition and diversity in the internet radio services. While the increase in royalties may seem negligible, tripling the per-song royalty rate adds up to an enormous royalty payment. Besides the per-usage rate, webcasters are also subject to a minimum fee per station and have no option to opt for a revenue-based royalty system.
SaveNetRadio is an important topic in my paper. It demonstrates the outrage of the music community to the CRB decision. The myths and facts of the cost of webcasting clearly describe the toll that increased royalties will have on small and large webcasters. SaveNetRadio.org is an extremely useful and interesting source. I think it is an excellent way to bring music fans together to fight the unfairness in the royalty system for internet radio stations.