To just about everyone's surprise, the Record Industry Association of America (RIAA) and the Voice of Webcasters (VOW) reached an agreement Monday on royalties for Internet radio.
In June of this year, at RIAA's behest, the U.S. Library of Congress imposed royalties which effectively shut down Internet-based music stations. In most cases, the charge of 7/100¢ per song per listener greatly exceeded the income of the station, particularly for those stations that didn't generate any income at all.
The House of Representatives' approval of H.R.5469 suspends the Library of Congress rules, paving the way for a new royalty agreement. The bill now heads to the Senate, where Patrick Leahy (D-VT) is already promising support.
Under the proposed deal, most webcasters will pay 8% of their revenues from 1998 through the end of 2002, increasing to 10% of revenue or 7% of expenses, whichever is greater. Webcasters making over $250,000 a year would pay higher percentages, while megacorporate types would be rightfully stuck with the old fee structure.
The agreement is expected to bring many webcasters back online who had been silenced since June. Yet it remains unclear exactly how very small-scale or college-based stations with zero revenue will be affected.
The RIAA and the government have repeatedly had to learn the hard way that alternative media sources cannot be silenced. Internet radio will continue to expose people to new music and voices which cannot be found on the FM dial. Stay tuned.