A congressional subcommittee holds a hearing Wednesday on a bill that would slash the royalties online radio stations pay musicians. Internet radio sites like Pandora say the legislation would finally make them profitable. Musicians say it’s unfair.
When one of cellist Zoe Keating’s songs plays on Internet radio, she gets just a fraction of a cent in royalties. She recently got a royalty check for the first six months of this year.
“I had one and a half million streams," she says, "and I got a check for $1,650.”
Keating is a fulltime musician, supporting her husband and toddler son. So $1,600 doesn’t go too far. But, the Internet radio sites say they’re struggling, too. They’re required to pay more in royalties than satellite and cable radio outlets. The Internet Radio Fairness Act would even things out. Some webcasters say they’ll go out of business if they have to keep paying the higher rate.
“The royalty rates are so high that it’s almost impossible for webcasters to build a business," says Kurt Hanson, founder and CEO of AccuRadio.
Musicians like Zoe Keating are against the bill, but she says she would compromise. Accepting lower royalties in exchange for more information on her fans so she could make money by inviting them to concerts, or alerting them to new songs they could buy.