After discussing for over two years, the Copyright Royalty Board (CRB) has set rates for commercial and noncommercial webcasts and Internet simulcasts, which some executives say will put small internet radio stations out of business.
Under current copyright law, owners of sound recordings must license their music for noninteractive webcasts and simulcasts. Webcasters and broadcasters may negotiate an individual rate directly with copyright owners or they may obtain the statutory compulsory license from government-designated agency SoundExchange at a set rate. SoundExchange must pay 50% of the royalties to the copyright owners (typically labels), 45% to featured artists and 5% to a union fund set up to pay background/session musicians and singers.
The Small Webcasters Settlement Act, which essentially let the little guys pay a percentage of revenue, expired in 2005. Now the CRB gets to set the rates for everyone big and small (currently $0.0008 per stream, with a minimum of $500 annually per channel or station).