Although the vast majority of them don’t know it, a fairly obscure government panel just made life better for music fans. The Copyright Royalty Board, which sets the rates that non-interactive online streaming companies must pay, just released a new set of rates for the next four years — and they represent the best sort of compromise between labels and broadcasters. For live radio broadcasters, the rates will actually come down a bit, which will help them to be more financially viable and make investments in talent and growth.
Before the ruling, the rate for nonsubscription broadcast transmissions was 23 cents. Starting next year, the rate for these transmissions will drop to 17 cents. This might sound like a small change, but it adds up over time, especially when you have real radio stations that employ DJs and other talent — not just an algorithm that plays songs.
The playing field is now much more even, and this will hopefully encourage even more innovation in online radio.
The ruling also closes a loophole that some larger services like Pandora, which offer the ability to skip tracks, were able to exploit, and increases their rate. The playing field is now much more even, and this will hopefully encourage even more innovation in online radio. It’s a hard space to be in, because there was always so much confusion and uncertainty about the costs, but now the rates have been set for the next four years, more content will be able to survive.
One of the biggest complaints about these pure-play “radio” services is they actually take business away from subscription services. For example, if you are able to create your own station based on an artist you like, and fast-forward until you hear your favorite song, there isn’t the need to pay Spotify $9.99 per month for the average consumer. Broadcast radio is the opposite, in fact only enhancing streams for new artists’ subscription services.
For a century, live radio has been the No. 1 tool to promote music. It never replaces the need to purchase or subscribe like a pure-play service could, since you have a finite amount of stations, and can’t fast forward or skip the songs. Live broadcasters were unfairly punished before this ruling, while pure=play services actually paid less because of confusion on what radio really was.
It’s pretty well accepted at this point that the future of music consumption is online, and virtually unlimited bandwidth should allow for many innovators to create stations.
For artists, this represents a win, as well. The rise in the rate for nonsubscription services should help to make up any shortfall, and it will encourage more players to enter the space — and that means more opportunities for music to be heard. And if you think these rates sound low, remember that performing artists aren’t paid anything when their songs are played on terrestrial radio.
It’s pretty well accepted at this point that the future of music consumption is online, and virtually unlimited bandwidth should allow for many innovators to create stations. Old radio was limited by how many spots there were on the dial, but now, anyone who loves a niche and has a great music collection can jump in and create something amazing for people to hear. This has led to far more opportunities for artists to be discovered, and people to connect around the world.
Today’s rate announcement was a victory for people who love to listen, and the talented DJs who help bring them great new music. Radio lives on, and will become stronger than ever, and help fuel the music business to new heights.
Scott Keeney, a.k.a. DJ Skee, is a renowned radio DJ, host of Skee TV, and founder of the groundbreaking Dash Radio, a curator-led digital broadcast platform that merges the best of terrestrial and Internet radio. DJ Skee has generated more than one billion media impressions in under a decade, and has more than 500,000 social network followers. Reach him @djskee.
This article originally appeared on Recode.net.