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RIAA, DiMA File Royalty Proposals

Proposals with the U.S. Copyright Office suggest vastly different Internet radio royalty rates.

The Recording Industry Association of America and Digital Media Association (DiMA), a trade group comprised of about 80 webcasters, filed proposals with the U.S. Copyright Office suggesting vastly different Internet radio royalty rates. A three-person Copyright Office arbitration panel will begin to examine rates for compulsory licenses in July, but it is expected to take at least six weeks to complete arbitration. At issue is a dispute between the radio and record industries over stipulations in the Digital Millennium Copyright Act of 1998 mandating that webcasters pay additional royalties to record companies when streaming audio.

Roughly 4,000 webcasters, including both terrestrial radio stations that stream their signals online and Internet-only webcasters, will be affected by the results of arbitration. The Copyright Office last December ruled that radio broadcasters must also pay royalties to the labels. At the time the DMCA legislation was passed, it was the NAB that pressed hard for the compulsory licenses that now fiscally threaten the viability of streaming radio.

As one might expect, the two proposals are very different. The RIAA’s recommendation calls for a rate of $0.004 per transmission of a portion of a song, roughly 27 times higher than the proposed rate from the webcasters, which would pay labels $0.0015 per listening hour (or approximately $0.00015 per song).

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