Posted June 26, 2007 9:17 am by with 8 comments

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Today across the Internet, many net radio sites are participating in a day of silence to protest an impending rate hike of royalties fees that goes into effect on July 15. The rate increase, according to, is retroactive to January 1, 2006, meaning net radio stations will immediately owe over 18 months of back royalty fees.

The Copyright Royalty Board was created in 2005 to establish royalty rates for broadcast material. Congress directly controls the board.

On March 2, 2007, the Copyright Royalty Board, the organization that oversees royalty fees paid by Internet radio sites, decided to increase royalty rates by 300-1200%. According to the website, Internet radio royalty fees are already more than double the royalty fees paid by satellite radio providers. Doesn’t seem quite right.

Yahoo! Music has supported this day of silence by shutting down its free LAUNCHcast service today. On the Yahoo! Music’s blog, Yahoo! does a great job of explaining some common myths about its music service:

Myth: Yahoo! (and other big Webcasters) can “afford” these rates.
Fact: LAUNCHcast loses money under these rates, Yahoo! has no appetite to run radio as a loss-leader.

Myth: All Internet radio should be for-pay subscription.
Fact: Less than 3% of our radio listeners are subscribers. Subscription is a feature for users who would prefer no interruptions, not an interesting business for anyone.

Myth: Radio drives tons of users into Yahoo! and therefore Yahoo! will operate radio at a deficit.
Fact: Not only is this a terrible way to structure an Internet business ecosystem so that it grows, it’s just not true. We’re fortunate to be a part of Yahoo!, the most visited network on the Internet, and the traffic the network drives to us is what makes us so popular. Not vice versa.

If you’re an avid listener to Internet radio like me (I highly recommend KBCO out of Boulder, CO) and don’t want to see a homogenized, Clear Channel-driven Internet radio world, contact your congress and make your voice heard on this issue.