All radio stations, whether they are broadcast over AM/FM or the Internet, pay a royalty of 3.5 percent of all revenues to songwriters and producers. But now, the implementation of new royalty fees for Internet radio stations is putting the future of small stations like Georgetown’s WGTB in danger.
In 1998, Congress passed the Digital Millennium Copyright Act, a bill backed by the Recording Industry Association of America, which requires Internet radio stations to pay additional royalties to musicians and record companies on a per-song, per-listener basis. They are also required to keep detailed records of the songs they play, something for which affordable software has not yet been created. An arbitration panel originally set the fee at .14 cents, but a ruling in June by Librarian of Congress James Billington cut it to .07 cents per song. A bill currently being discussed in the Senate would decrease the per-song fee from .07 cents to .02 cents per song for small Internet radio stations like WGTB. This bill is a step in the right direction, but if small stations such as WGTB are to thrive, the per-song fee should be eliminated completely.
Although the fee has yet to be set permanently, it is estimated that based on listenership, WGTB might have to pay as much as $1,500 per year. WGTB receives $5,300 a year from the school and raises $2,000 in revenue. A payment of $1,500 would eat up a significant portion of the operating budget. Many small stations, WGTB included, webcast because they cannot afford or have not been granted licenses for FM frequencies. The implementation of the new fees will make it largely impossible for a small station to move from Internet radio to AM/FM. Stations will either be forced to pay the exorbitant royalties or shut down completely.
While the act is aimed at larger Internet radio stations, independent stations become the victims of the RIAA’s greed. Additionally, the act doesn’t require traditional AM/FM stations to pay the per-song per-listener fee, a clear discrimination against webcasters.
Congress needs to step in and level the playing field for Internet broadcasters, or stations like WGTB don’t stand a chance against the record industry. RIAA should be satisfied with its 3.5 percent royalties and astronomical CD sales and leave small webcasters alone.
