WXYC Must Pay Royalties For Internet Simulcasting

The message has come through loud and clear for WXYC, UNC's student-run radio station, and anyone involved in Web casting: Time to pay up.

The new royalty rates for the transmission of programming online by commercial and noncommercial broadcasters per performance are 0.07 and 0.02 cents, respectively. A performance is defined as one person listening to one song.

Slightly higher rates were recommended by the Copyright Arbitration Royalty Panel, modified and adopted by the Librarian of Congress and officially published by the U.S. Copyright Office on July 8.

Payment is retroactive to Oct. 28, 1998, when the Digital Millennium Copyright Act was enacted. The act calls for copyright holders to be paid when their work is put online.

The new payments will go to the copyright holders of the recordings, the majority of which are labels represented by the Recording Industry Association of America.

WXYC Station Manager Jason Perlmutter estimates that WXYC will have to pay only the minimum royalty rate of $500 per year. Regular Web simulcasting, on average, attracts about 30 listeners per hour.

The station has an annual budget of about $17,000. But paying $2,000 for four years of Web casting is no small matter. From now on, WXYC also will have to log every song title, artist, album title, record label, catalog number, International Standard Recording Code, transmission dates, times and other data.

"Reporting requirements are actually the real kicker," Perlmutter said. "They are quite burdensome and may very well be designed to knock off small community and educational stations who lack time and manpower to meet them."

WXYC's online operation is still up and running, but the new requirement's damage to the Internet radio industry in general could be massive.

"This is still very much a pre-profit industry," said Paul Maloney, editor of the Radio and Internet Newsletter. "The advertisers haven't picked up on it yet.

"Most of the industry will shut down."

The retroactive payments must be sent by Oct. 20 to SoundExchange, a program established by the RIAA. SoundExchange is responsible for collecting and distributing the royalties for sound recording copyright holders within various digital channels.

"Frankly, we just want to make sure that the right people get paid the royalties they're entitled to," said John Simson, executive director of SoundExchange.

Simson also said that few of the parties involved agree with the government-imposed, one-size-fits-all license. He said large-scale companies used their considerable clout to swing the arbitrators' decision in favor of larger Web casters over smaller stations with less money.

"We've certainly been working hard to try to make that distinction," Simson said. "(Small stations) are different and ought to be treated differently than the big guys."

Whether the different parties are making headway or not, Perlmutter says the station could find better ways to spend its money.

"It's a huge setback for Internet radio," Perlmutter said. "Listeners will lose out on the choice of interesting alternatives to the dull commercial offerings that dominate."

 

The Arts & Entertainment Editor can be reached at artsdesk@unc.edu.