The day the music died: How the recording industry is coping with digital piracy
A bill called the Internet Radio Fairness Act..would decrease the royalty percentage Internet radio companies pay artists and rights holders, according to Darvio Morrow, CEO of The First Class Broadcasting Corporation.. Morrow said passing the bill would even out the royalties that online radio stations pay the artists because they currently pay the most in royalties of all digital radio mediums—more than half of their income.
“Right now, satellite radio, cable radio and every other form of digital radio have their royalties calculated by what’s called the 801(b) standard,” Morrow said. “That takes into account economic conditions to make sure the royalties [paid to the songs’ rights holders] are not so onerous that it could put the company out of business. Internet radio is on a different standard.”
Morrow explained that online radio stations pay more than 50 percent of revenue in royalties to artists and rights holders...