Copyright Royalty Board Releases Music Royalties for Internet Radio Streaming for 2006-2010—Clarifying the Confusion [April 2007]

By David Oxenford

On Friday, March 2, the Copyright Royalty Board (CRB or the “Board”) released its decision on 2006-2010 royalties for the use of sound recordings when streaming music on the Internet by Internet radio stations and other non-interactive steaming services operating under the statutory license. That decision can be found on the CRB website, and we have written about it extensively on our blog under the topic heading Internet Radio. As set forth below, unless there is a subsequent settlement or a successful appeal, royalty rates are going to rise significantly over the next few years. More importantly, especially for smaller entities, under the new decision there are no royalty rates based on a percentage of revenue as were previously in place under the Small Webcasters Settlement Act (SWSA). Instead, all royalties are set as a per performance payment, i.e. a payment for each song as heard by each listener. The new rates are effective immediately, even though they could be overturned on appeal, with the first payments due on May 15 for streaming which took place in March.