Digital Broadcasters Alliance

Digital Broadcasters Alliance

Royalty payments in webcasting rates and online news

Streaming Revenue Appears to be Slowing

webcasting rates online news

After the world has experienced lockdowns and restrictions, imposed by way of the virus, and inflationary pressures, it is unsurprising that streaming revenue has slowed.

According to Mark Mulligan, the founder of MIDiA Research, global streaming revenues is slowing, despite strong performance from Spotify.

As has happened before, the music industry is intent on finding new sources of revenue.

During the past few years, the Copyright Royalty Board granted to SoundExchange almost all of its petitions to increase royalty rates.

In particular, the CRB increased the amount per performance and it increased the minimum annual fee per channel from $500 to $1,000 per channel.

Recording artists, lyricists, composers and publishers are all seeking greater streams of revenue, even as the economy has been affected by lockdowns, restrictions and vaccine mandates.

In the context of the institutional owners of the record labels, according to, Vanguard owns over ten million shares of Warner Music.

For its part, Blackrock owns nearly six million shares.

Goldman Sachs owns nearly 900,000 shares of Warner Music.

The other large record companies are Universal Music Group of Vivendi and BMG.

SoundExchange is the entity in the United States that collects royalties for the record labels and recording artists.

Reportedly, SoundExchange distributes about half of royalties collected to recording artists and the other half to the record labels.

According to Mr. Mulligan, the institutional entities that have controlled the music industry and related entities have become acclimated or used to what he called “rapid” streams of revenue.

During the early 2000’s record sales were declining, as more and more people moved to the internet.

Recording artists, record labels, publishers and lyricists all want to increase revenue, but the dilemma is that copyright users have difficulties with the current system, leading to calls for change, he wrote.

Even a large streaming company like Spotify reported a net loss of about $500 million in 2022, according Mr. Mulligan.

Nor should this surprise, as royalty fees imposed by the Copyright Royalty Board and collected and distributed by SoundExchange, constitute a large percentage of Spotify’s revenue.

webcasting rates  online news

Even small internet radio only stations pay exorbitant fees, even when there are comparatively few listeners and no revenue is created, according to reports.

According to Mr. Mulligan, revenue has been on the decline, too, because of fragmentation of distribution of music listeners, the lack of artist longevity, too much music being released and the lack of superstars.

Certainly the environment is radically different than it was 25 years ago, when the internet was in its infancy and physical stores selling CD’s and records were still a realistic business model.

He mentions the fierce and abundant competition for revenue, as distribution over the internet creates many stakeholders.

Given current conditions he’s calling for major changes in the way music is distributed and the way revenue is created.

He agrees that if royalty fees are increased too much, the system would break.

But he also maintains that the use of streams should be metered, for example, when users access music streams.

Once a subscriber has expended his or her allotment, then access to additional streams would end unless the user purchases a higher level of subscriptions.

Still, he warned that copyright holders and companies need to be careful about pressing their interests too much against other stakeholders, for example, the users of music:

“Streaming’s problems are supply side issues, not demand-side. All industry stakeholders should be careful about pushing solutions that could favour the supply side without proper consideration of the demand side. The history of business is littered with the corpses of companies that did not properly consider the needs of their customers.”

While he mentions pursuing a compromise, he maintains that finding a comprise that will satisfy copyright holders and copyright users will be difficult.

According to APS Radio and other small entities that create no revenue, even given a small listener base, remitting royalty payments can be a great and significant burden that could shutter those entities.

Yet, there is a need to pay artists for their works, creativity and innovation.

But there is a need to prevent an adequate and democratic distribution of music.

Another problem concerns the age of particular genres of music and particular songs.

Do many people still listen particular songs popular in America in the 1800’s?

In various countries, copyright-protected material enters into the public domain earlier than is true in the United States.

Always arises the question is this: How much is the consumer willing to pay for something.

This pertains to the standard imposed by the Digital Millennium Copyright Act: “the willing buyer and willing seller” standard.

That standard replaced the older standard that considered not only the interests of copyright holder but the interests of the copyright user and the interests and needs of society to enjoy and access intellectual property.

If intellectual property, however worthy, becomes too expensive, will there always be a “willing buyer”.

These are questions that will need to be addressed by future legislation, according to observers.

webcasting rates online news

internet radio & online radio
APS Radio
Scroll to Top