As the radio industry gears up for a new rate-setting process on streaming rates, one group head believes broadcasters should consider pushing for a new framework for how digital royalties are determined. Beasley Media Group CEO Caroline Beasley says as online listening numbers grow, the pay-to-play model that has increased costs with each new listener should be replaced with one based on a company’s revenue.
“I would like to see, rather than a pay-to-play model, more of a percent of revenue because then you could plan your business models going forward and you can make assumptions. It’s very difficult [to do that] in the pay-to-play model. That would be my proposal, but it’s the industry that is going to have to come together and decide what works for the industry,” Beasley said on the latest Inside Radio Podcast. Asked whether broadcasters are unified in that position, she said, “I think there are more owners in agreement than not.”
The deal radio is currently under covers the Jan. 2016 to Dec. 2020 period. The formula adopted by the Copyright Royalty Board set royalty rates on non-subscription advertising-supported webcasts at $0.17 for every 100 songs streamed. Unlike the prior royalty structure, the Web IV rates also didn’t include an alternate calculation based on percentage of revenue, but instead are solely based on per-performance rates.
A federal appeals court last September rejected a challenge to the CRB’s rates brought by SoundExchange, which had argued that CRB erred when it reduced what broadcasters were paying by roughly one-third compared to the $0.25 that most broadcast streamers had been paying under the previous 2011-2015 rate agreement.
The linking of digital streaming rates to an on-air performance royalty is one of the potential ideas floated by the National Association of Broadcasters as a way for the radio industry to settle, once and for all, the decades-long debate of whether stations should pay royalties on AM-FM airplay. “That’s still the architecture. We’re working to trade ideas as to what formula would be applied, what numbers would be applied, those kinds of things. But there’s been no offer,” NAB President Gordon Smith told Inside Radio in a Q&A last October.
Beasley, who just completed a term as chair of the NAB Joint Board, says a formal offer still hasn’t been made to the music industry. But now, speaking just as the head of one radio group, she thinks it’s still something worth discussing. “I would take a look at that,” she says, adding, “But I’m not speaking for the industry.”
Listen to the Inside Radio podcast HERE.