If you listen to a local radio station streaming online, a service like Pandora, or an online polka station like 247PolkaHeaven or Polka Jammer, you’ve probably heard the uproar over the Copyright Royalty Board’s decision to substantially raise performance royalty rates paid by online radio operators (webcasters). Starting July 15, royalty rates will be changed from a percentage of revenue to a per-song, per-listener fee, with a minimum fee of $500 per month. The rates are also retroactive to January 2006.
These new royalty rates (which are collected by a record industry-backed organization called SoundExchange) threaten to put many webcasters out of business entirely. SoundExchange counters that most of these increased royalties go to artists, who deserve to be fairly compensated for their work. The issue is coming to a head in Congress where the recently-proposed Internet Radio Equality Act intends to reduce rates and bring them in line with what satellite radio operators pay. It appears unlikely, though, that Congress will act on the bill before the new rates take effect on Sunday.
(Note: This is a mile-high view of a relatively complicated issue; if you want to learn more, David Byrne has one of the clearer explanations I’ve read.)
So, where do online polka radio stations fit into all this?
Ever since we started this site, I’ve been amazed at the vibrant community of online polka radio broadcasters and listeners. For a genre that’s been virtually eliminated from the commerical radio dial, it’s heartening to see so many people enjoying and spreading that music online. However, the online polka radio stations are run for love, not money, and these fee increases could kill one of the few arenas where polka music has managed to thrive.
However, the Polka America Corporation has stepped in and brokered a deal with SoundExchange that will allow online polka radio to continue. They’ve worked out a licensing program where stations can continue to stream music from polka bands who waive their right to any performance royalties (which were pretty much non-existent anyway). Bands just need to sign up with the PAC in order for their music to be played on online polka radio going forward.
It’s not an ideal solution — while the online polka stations can continue broadcasting, they’ll have to limit their repertoires to those artists who’ve signed the licensing agreement. But it’s certainly better than the alternative: the elimination of online polka radio entirely.