Killing the Goose that Lays the Golden Egg

Jake Ward of

That’s what music artists who support SoundExchange are doing.  The Copyright Royalty Board, a division of the Library of Congress, has established a new fee structure for music radio stations on the Internet.  This new, higher rate goes into effect Sunday, and it’s retroactive to January 1 of last year.  My rough calculations show that a small webcaster with 200 people listening at any given time will pay around $390 a month in royalties for the music it plays.

I seriously doubt that webcasters with an audience that small earn $400 a month in advertising.  But since the fee is retroactive, that small webcaster would have to scrape up about $7,000 right off the bat.

I talked with Jake Ward today. He’s the spokesman for the Save Net Radio Coalition. I fail to see how music artists benefit from this government-enforced armed robbery.  Most small American webcasters, faced with a hobby that’s suddenly become very expensive, will simply shut down.  Without exposure, the artists who anticipate a windfall will get bupkis.

Ah, there’s the rub:  What about webcasters whose servers are offshore?  Will we see a mass migration from U.S. web hosting companies to ones with streaming servers in the Cayman Islands?

And pardon me for being a conspiratorial sort, but it seems to me that the only webcasters left standing at the end of this legal wrangling are the ones with very deep pockets.  Is it possible that this is just a back-door play by big media interests to drive smaller competitors off the Internet?


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