Like everyone else in radio, the folks at National Public Radio are hot under the collar about the skyrocketing royalty rates set for Internet streamers earlier this month by the Library of Congress' Copyright Royalty Board. The new rates, retroactive to 2006, run through 2010 and double the current rate by the end of the span.
"This is a stunning, damaging decision for public radio and its commitment to music discovery and education, which has been part of our tradition for more than half a century," said NPR VP of communications Andi Sporkin. "Public radio's agreements on royalties with all such organizations, including the RIAA, have always taken into account our public service mission and nonprofit status. These new rates, at least 20 times more than what stations have paid in the past, treat us as if we were commercial radio — although, by its nature, public radio cannot increase revenue from more listeners or more content, the factors that set this new rate. Also, we are being required to pay an Internet royalty fee that is vastly more expensive than what we pay for over-the-air use of music, although for a fraction of the over-the-air audience."
Sporkin went on, "This decision penalizes public radio stations for fulfilling their mandate, it penalizes emerging and non-mainstream musical artists who have always relied on public radio for visibility, and ultimately it penalizes the American public, whose local station memberships and taxes will be necessary to cover the millions of dollars that will now be required as payment. On behalf of the public radio system, NPR will pursue all possible action to reverse this decision, which threatens to severely reduce local stations' public service and limit the reach of the entire music community."
Sporkin said NPR will on Friday file a petition for reconsideration with the CRB panel, the first step in the appeal process. NPR will ask that the online royalties be returned to their historic arrangement so "public radio can continue to provide its vital service to music discovery."
The dramatic rate increase has sparked editorials recently in the Los Angeles Times and in the San Jose Mercury News. Last Thursday, the Times said the increase was "nominally a victory for labels and artists," but went on, "But the victory could be Pyrrhic if it forces a consolidation and commercialization that robs online radio of its musical diversity."
On Tuesday the Mercury News wrote, "The fees are so high they would wipe out many Internet radio stations and severely curtail even the largest operations like RealNetworks and AOL Radio." The editorial continued, "The board should reconsider its unfair decision -- or at least stay its ruling until Webcasters have a chance to appeal or negotiate a settlement with the music industry. If a fair agreement cannot be achieved that way, Congress must step in to protect the nascent Internet radio industry."
Concluded the Mercury News, "If the recording labels are smart, they will avoid a legislative battle and negotiate a fairer royalty system on their own."
By Jeffrey Yorke - radioandrecords.com
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