Deals are being made in the UK and the US with regards royalty payments for internet radio stations. Webcasters have been suffering as they wait for broadband internet access to spread – existing royalty obligations have made it difficult for many to continue. Now a trial scheme will allow globally-based internet radio stations to play more than 200 artists on independent UK labels - including Tom Jones, Badly Drawn Boy and Paul Oakenfold – at a much more affordable rate. Negotiated by the Association of Independent Music internet radio stations will pay a share of their own profits in return for access to the collective label’s catalogues. It is hoped the deal will help gain more exposure for UK music. British web stations are already on board and AIM hope to get interest around the world.
AIM’s Sam Shemtob explained: "We have consulted with internet radio stations before coming out with the system, so we are pretty confident that the webcast industry in the US and beyond will be very willing to participate in this." Keith Harris, president of the UK's Music Managers' Forum, has leant his support for the scheme, telling the BBC: "With traditional radio saturated virtually everywhere, webcasting is vital. This deal, provided there is adequate provision for artist payments, makes it easy for us to be played and paid and will help propel UK artists internationally." The webcasters now need to tackle the tricky task of a deal with the major labels.
In the US the matter has been discussed in the House of Representatives where smaller Webcasters claimed existing fees – which amounted to 70 cents per 1000 listeners per track – would put them out of business. The new bill, like the UK deal, means webcasters whose gross revenues are less than $1 million a year will pay a percentage of profits rather than a per listener fee. However the deal will require webcasters to make back payments of profits since 1998 – though the required percentage will be smaller for past years.
The bill was passed yesterday after final wranglings between the RIAA and artist groups were resolved. Artists argued royalties from webcasting should come straight to them, not via the record labels. The RIAA agreed to this providing non-profit making royalty collecting companies (their equivalent to our PRS) could take a fee to cover the costs of their work.