This is where things get very sticky.
Until now, college broadcasters were able to pay a flat rate royalty based on the size of their campus and the maximum number of listeners supported by their streaming hardware.
I can’t find a definitive answer for what’s going to happen next, but it looks like the intent of the CRB is to let a stream’s profits or funding determine the playing field. The CRB removed the percentage of profits option because a non-profit station or a for-profit company doing poorly would have an “unfair advantage” over a more profitable business.
As the National Association of Broadcasters interprets it, the CRB feels it wouldn’t be fair to let a small webcaster grow an audience for free when AOL or Yahoo have to pay. (When even the NAB is unhappy, you know something’s not right.)
As one broadcaster points out, it would take nearly 15,000 “listens” for many of the artists featured on college radio to ever qualify for a payout from SoundExchange, making these requirements even more onerous.
And, as we feared back in 2002, some courts might construe a public radio stations entire revenue as a “profit” basis for calculating royalties, meaning a disproportionate share of station fundraising would end up supporting a niche audience. (Many GMs would be forced to end public radio streaming under such an arrangement.)
Five years ago, when we faced a similar crisis, it took about seven months for common sense to prevail. However, five years ago, I could host a small dinner party at my home for all of the netcasters whose personal livelihoods would be threatened by this. Today, I might need a hotel ballroom.
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