Internet music broadcasters worry that a new ruling could put many of them out of business by drastically increasing the royalty payments they have to make to record labels and artists, an Associated Press report said.
The Associated Press report said the new rates, which are retroactive to last year, were decided by the Copyright Royalty Board, a panel of three copyright judges, and made public on the board's Web site, http://loc.gov/crb.
The ruling could have the greatest impact on startup companies that make their living from broadcasting music online and selling advertising to pay for it, the report said.
For large radio companies like Clear Channel Communications and CBS, online broadcasting still makes up a relatively small portion of their overall business, the report added.
Kurt Hanson, who founded an online radio company five years ago called AccuRadio, said his six-employee company managed to 'eke out' a profit last year under the former rate structure that called for paying royalties of 12% of revenues to music publishers, the report said.
Under the new rates, which charge per song and per channel regardless of how much advertising money is being generated, would put Hanson's company out of business, he said, increasing his 2006 royalty bill from $48,000 to $600,000. Hanson testified at hearings of the copyright board on behalf of smaller webcasting companies.
Hanson said he was aware of about 50 companies that paid royalties for streaming music online under provisions for small webcasters, including Digitally Imported, and a husband-and-wife company called 3WK.\n
Larger companies like Yahoo Inc. and Time Warner Inc.'s AOL unit also have significant Internet radio operations that would also be affected by the new copyright rates.\n\n
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Italy's Fastweb set to launch free Internet TV\n
(Associated Press via NewsEdge) The founder of Fastweb, \nItaly's No. 2 telecommunications company, is now seeking to bring Internet television to as many of the world's 300 million broadband users with an Internet TV network called Babelgum.\n\n
Babelgum, which will be introduced publicly in a testing phase this month, uses peer-to-peer technology supported by an in-house server to deliver free video to computers anywhere in the world where there is a broadband service, \n going head-to-head with Joost, founded by the Internet gurus who invented Skype.',1]);//-->Radioio.com and a husband-and-wife company called 3WK.Larger companies like Yahoo Inc. and Time Warner Inc.'s AOL unit also have significant Internet radio operations that would also be affected by the new copyright rates, the report further said.