{"id":1844,"date":"2007-03-05T22:21:17","date_gmt":"2007-03-05T22:21:17","guid":{"rendered":"http:\/\/www.adambowie.com\/2007\/03\/streaming_radio\/"},"modified":"2007-03-05T22:21:17","modified_gmt":"2007-03-05T22:21:17","slug":"streaming_radio","status":"publish","type":"post","link":"https:\/\/www.adambowie.com\/blog\/2007\/03\/streaming_radio\/","title":{"rendered":"Streaming Radio – US v UK"},"content":{"rendered":"

So the big news in the US at the moment is the announcement by the Copyright Royalty Board<\/A> of the prices for internet radio royalty rates. A summary can be found here<\/A> on Radio and Internet Newsletter site. As that same site points out, the prices being talked about, based on a “per play” basis (ie you pay per listener, per song), will price most players out of the market since these royalties alone probably eat up 100% of advertising revenues earned at the same time. And there are still composers’ royalties to go.
\nThis puts question marks over services like pandora.com<\/A> – can they ever be run as a profit-making business?
\nLet’s just step back a second and consider how this compares with the UK. I think<\/I> I have all these facts correct, so please do point out any errors I’ve made, and I’ll correct as soon as I can.
\nIn the UK a broadcast radio station must pay two elements for most music. The royalties for the composers, songwriters and publishers, and the airplay royalties which are payable to the performers and record companies.
\nThe MCPS-PRS Alliance<\/A> collects and distributes royalties for composers, songwriters and publishers. Stations provide lists of the music they play to the PRS who then distribute revenues generated by the station accordingly.
\nThe payment for a large station is 5.25%<\/A> of Net Broadcasting Revenue (where revenues are over £1,061,498).
\nPPL<\/A> collects and distributes airplay royalites on behalf of the record companies and performers. Again, stations provide lists of the music they play to PPL who then distribute revenues generated by the station accordingly.
\nThe payment for large stations is also 5.25%<\/A> of Net Broadcasting Revenue (if revenues over £1,027,808)
\nSo approx 10.5% of broadcast revenues are passed on to these two bodies. There are a few other payments here and there, but simplistically this is broadly correct for a commercial radio station. These include the right to simulcast in the UK on other platforms including the internet, DAB, satellite and cable.
\nNote that PPL insists that this licence “does not permit the broadcast of a Station via the Internet outside of the UK. Any station intending to broadcast via the Internet outside of the UK will require a separate multi-territory licence for which there will be additional fees. Please refer to our website for further information or contact the Rights Negotiation Department directly.”
\nPPL has a set of licences here<\/A> and you’ll notice that it’s very complicated and works in different ways for different countries. As a radio station, for each play of a song, you should identify which country the user resides in, and what the payment for that user should be. Adding these revenues all up could come to a sum greater than the whole. And most of the world isn’t even included. As a result of this, many UK stations force listeners to enter their postcode to prove that they’re a UK resident. Obviously nobody from overseas could ever do this.
\nNote that internet only radio stations in the UK are separately charged on a “per play” basis.
\nThere’s also the small issue that it’s not really any of a UK royalty agency’s business what I do overseas. That’s for those countries to look into.
\nIn the US it’s very different. Radio stations have historically been required to pay per-song royalties to songwriters but not to performers, recording companies or anyone else who owns the rights to the “sound recording” of a song. The reason for this is that in the past radio stations argued that they were promoting artists by playing their music. This money is collected by BMI<\/A>, ASCAP<\/A> or SESAC<\/A>.
\nBecause each of these three organisations represents different songwriters, composers, publishers and copyright holders, most US music stations would get licences from all three of these bodies.
\nHow much they pay is one messy business that’s hard to untangle. The Radio Music License Committee acts to represent most US radio stations with regard to what they have to pay. But it’s not simple, and a long running battle has tried to move stations away from the funding model adopted in the UK where it’s simply a proportion of revenues that’s handed over<\/A>. There’s a synopsis here<\/A> but it’s not straightforward.
\nBroadly speaking the different Performing Rights Organisations (PROs) charge different amounts based on different criteria. They might be based on flat rate costs, the size of the station or a proportion of the station’s revenue. What that overall proportion of revenues is, I don’t know. Is it as much as 10.5%? Who knows…
\nBut one thing is clear, unlike the UK where online simulcasting is allowed, US stations have to pay a per play per user amount and that’s where we came in. Set this figure too high and it’s very quickly uneconomical to offer a streaming service. And that’s why you’re only likely to be getting fewer streaming radio services from the US, replacement advertising copy for streams (there are advertising copy rights issues too), and generally big problems for US radio as we try to become ever more digital.
\nIt also means that services like pandora.com<\/A> and the UK based last.fm<\/A> might find themselves in very “grey” areas legally unless they’re very careful. Some might argue that they already are in such an area.
\nSo UK services pay for all elements of every song they play, whereas US services only pay part of it, yet a station can’t simulcast online in the US as they can in the UK. Swings and roundabouts? Well that really depends on the proportion of revenues overall that each type of station is paying – you do need to consider the whole on not look at streaming separately. The cost of streaming is another broadcast cost, just like the cost of maintaining your transmitter(s).
\nIt’s in everybody’s interests that fair and equitable solutions are found. Radio drives music sales, and listening is moving digital, and a lot of that is going to be online. Making the business of streaming radio uneconomical is not going to help anybody in the record industry – an industry that’s already struggling.<\/p>\n","protected":false},"excerpt":{"rendered":"

So the big news in the US at the moment is the announcement by the Copyright Royalty Board of the prices for internet radio royalty rates. A summary can be found here on Radio and Internet Newsletter site. As that same site points out, the prices being talked about, based on a “per play” basis […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"cybocfi_hide_featured_image":"","footnotes":""},"categories":[14],"tags":[],"class_list":["post-1844","post","type-post","status-publish","format-standard","hentry","category-radio"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.adambowie.com\/blog\/wp-json\/wp\/v2\/posts\/1844","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.adambowie.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.adambowie.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.adambowie.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.adambowie.com\/blog\/wp-json\/wp\/v2\/comments?post=1844"}],"version-history":[{"count":0,"href":"https:\/\/www.adambowie.com\/blog\/wp-json\/wp\/v2\/posts\/1844\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.adambowie.com\/blog\/wp-json\/wp\/v2\/media?parent=1844"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.adambowie.com\/blog\/wp-json\/wp\/v2\/categories?post=1844"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.adambowie.com\/blog\/wp-json\/wp\/v2\/tags?post=1844"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}