The price of an online song -- a tenth-cent per listener?

Internet-Copyright & Encryption
The price of an online song -- a tenth-cent per listener?
By Newshare staff
Jun 26, 2002, 11:52pm

What's the price of a song played online? Seven-hundredths of a penny, according to the U.S. Librarian of Congress.

The rate is substantially less than that proposed in February by the Copyright Arbitration Royalty Panel, which would have charged Internet-only broadcasters twice the amount AM or FM stations would pay to retransmit their broadcasts online.

At that price, compulsory royalty payments will mean most streaming-audio online "radio" stations won't make it -- at least not without charging users.

Even the largest Internet radio presence, Live365 Inc., which operates a network of about 30,000 stations, would be forced to shell out approximately $100,000 per month, its vice president John Jeffrey told the Associated Press. Joe D'Angelo at VH1.COM has the story. Internet broadcasters such as Beethoven.com were stunned by the ruling, San Jose Mercury News columnist Dawn C. Chmielewski wrote.

Predictable, the Associated Press found the record industry saying the price was too low (it had hoped for four-tenths of a cent) and the online industry saying it was too high.

It is an arcane aspect of U.S. copyright law that the Librarian of Congress sets rates for what Internet broadcasters must pay for the privilege of streaming copyrighted music online.

Insiders had predicted before the LoC's decision that the rates being considered would put some Web broadcasters out of business. James Turner of the Christian Science Monitor has been following the story. YOu can also read the Wall Street Journal's article by Jeff Bater if you're a WSJ-registered user.

Screen Digest reported in a May study that in April 2001, the Recording Industry Association of America (RIAA) and the Digital Media Association (DiMA) submitted proposals to the U.S. Copyright Officer concerning the royalty rates webcasters should pay. The DiMA proposed a rate of $0.0015 per listener hour for play music, a charge similar to that placed on terrestrial radio stations. The RIAA suggested a charge of $0.004 per streaming song, a rate based on fees it negotiated individually with 25 webcasters.

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