FM Streaming Royalty Rates

[TheBigA]

It's that time again. The Copyright Royalty Board will re-evaluate the rate that FM stations pay artists, labels, and musicians for online streams of their stations. It could go up, it could go down, or stay the same. The NAB is arguing than the rate should go down. Of course the music industry is saying the opposite:

Streaming Royalty Rate Decision Looms; NAB Pushes For Lower Rate For Station Simulcasts.

In the coming days the radio industry is likely to find out how much streaming on the web will cost stations in the years to come. The Copyright Royalty Board

www.insideradio.com

The big problem is the inability of FM stations to monetize their streaming.

 

[Kelly A]

The big problem is the inability of FM stations to monetize their streaming.

Yep, since 2008 many small to medium market stations have chosen to drop streaming for that reason. Even some stations who play unique mixes of music like Island 98.5 in Hawaii used to charge for streaming. They had to drop streaming because the cost exceeded the revenue. Unless you're iHeart, or a large group with lots of unique programming, streaming is a loss leader.

 

[TheBigA]

On Friday, the Copyright Royalty Board announced new music royalty rates, and the NAB lost in its attempt to lower FM streaming royalties. Rates will go up from .0018 to .0025 per song/per listener through 2025.

CRB Raises Royalty Rates - Radio Ink

On Friday The Copyright Royalty Board announced its Web V proceeding, which details how much radio stations will pay in streaming royalties through 2025. To explain exactly what was decided, and how much more you will pay, we reached out to Broadcast Attorney David Oxenford.

radioink.com

Not good news for radio stations that stream on the web. This applies only to the royalty radio pays to SoundExchange.

 

[Deleted User]

well you can bet that many small commercial stations will start geo-fencing their streams to in market ISP's.

It is hard enough to monetize a stream, why give it away with no chance of it recuperating the cost and being a drain on station resources.

I had this conversation with one of the moderators of my FB radio group (you know you work in radio when) and he said the decision to limit connections to his stations stream saved enough money to save a position from being cut during the C19 drop in revenue.

 

[Kelly A]

well you can bet that many small commercial stations will start geo-fencing their streams to in market ISP's.

Geofencing comes at a price. It's an expensive option.

It is hard enough to monetize a stream, why give it away with no chance of it recuperating the cost and being a drain on station resources.

Unless aggregated like iHeart does, it's pretty much impossible for a few stations to break even on ad banners. Most of those banners are tossed in for the client paying for radio spots.

I had this conversation with one of the moderators of my FB radio group (you know you work in radio when) and he said the decision to limit connections to his stations stream saved enough money to save a position from being cut during the C19 drop in revenue.

Most station owners and managers want to do streaming because of the potential for at-work, or in-home listening through smart speakers. Problem is; unless you're NPR, streaming is a money loser.

 

[boombox4]

Geofencing comes at a price. It's an expensive option.

What makes it so expensive? Just curious.

Wouldn't it just be an app that 'sees' the locations of visitors' IPs and either block them or allow them to listen?

 

[Kelly A]

What makes it so expensive? Just curious.

Adding the algorithm to query the location via the incoming IP address and then allow, or block that traffic, is considered a premium by the Content Management Service. The alternative is someone enters the site and a player just plays the clip or stream.

Wouldn't it just be an app that 'sees' the locations of visitors' IPs and either block them or allow them to listen?

That's basically how it works, but it needs to use analytics to determine where the traffic is coming from, compare that location with a look-up table to determine whether the intended viewer is allowed to view/listen to the traffic, then play the livestream/clip. Those are calculations that run via separate applications in the background. It costs the CMS money to create them, uses more server resources, and therefore the CMS rightfully charges for that service.

 

[TheBigA]

The other side of the geofencing discussion is if you're a local owner that has unique content that people want, why not try to play in the international streaming world? It could provide another source of revenue if you do it well. The only catch is that you need to have unique content.

One example I give is KPIG in Monterey. They've been a popular rock station for decades. They've been streaming for 25 years. They offer new listeners a week of free streaming, then ask them to subscribe. The subscription is used to pay the music royalties. So this is a radio station that has adapted to the changing world and is trying to monetize it.

I don't expect to see any of the major owners, especially iHeart or Audacy, geofencing signals. They are devoting time and energy to monetizing their streams and building their owned streaming platforms. Right now they're really the only two companies in this business.