Internet radio listeners, forget about the Apple iPhone releasing on June 29th for one minute and realize the consequences of what will happen on July 15th, 2007. Royalty rates for Internet radio will be increasing at an alarming rate as set by the Copyright Royalty Board in Washington D.C.
Two days ago, about 21 Internet radio websites shut down their service to make a statement. It was officially the Internet Radio Day of Silence on June 25th. I was not aware that this was going on until I read a blog post on Yahoo’s blog, Yodel Anecdotal.
“The new royalty rates are higher than the revenues anyone can hope to make from related advertising. In other words, we all lose money on Internet radio starting July 15th. Yahoo! has no intention of operating LAUNCHcast radio as a loss-leader,” wrote Ian C. Rogers of Yahoo! Music. Rogers began working for Yahoo! Music three and a half years ago after Yahoo! acquired Mediacode. Rogers wrote a brief history of the situation with the Copyright Royalty Board on the Yahoo! Music Blog.
If the bill passes, Internet radio companies will start losing money. Less than 3% of Yahoo! Music subscribers pay for music and the money made from ads is not sufficient enough for the hike in royalty fees. So if Yahoo! Music keeps losing money along with the other Internet radio companies, keeping them afloat won’t be easy. Many companies cannot afford the royalty rates and may even shut down.
Royalties will increase between 300 and 1200 percent. Internet radio currently pays double of what satellite radio pays and Internet radio listeners jumped from 45 million listeners per month to 72 million listeners since last year. Yahoo! Music has been providing value to Internet radio listeners for years and for free. I don’t want to see the service taken away as it is one of my favorite products made by Yahoo!
