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An Arbitron/Edison Media Research study last year estimated that 52 million Americans had listened to Internet radio in the previous month. Advertising revenues from online music broadcasting have grown rapidly over the past few years, from about $50 million in 2003 to $500 million last year. Here are the articles where I picked up on this upcoming proposed change for streaming royalties:
http://www.chicagotribune.com/technology/columnists/chi-0703070314mar07,0,6077662.column
http://www.kurthanson.com/archive/news/030207/index.shtml
http://www.saveourinternetradio.com/faq/

Dear Senator,

I am writing regarding some important information about internet broadcasting that involves the recent ‘settlement’ between the R&R industry lawyers and the copyright royalty board. Internet radio stations are now going to be required by the Copyright Royalty Board to pay both performance and composition royalties on music played. This stifles internet growth as a medium for independent broadcasters and is not balanced with the fee structure levied upon traditional am and fm broadcasters. Regional and local programming has all but died. Each piece of music has two copyrights attached to it. One is a copyright on the composition, which is owned by the songwriter or music publisher. The second is called the “performance copyright” and is owned by the recording artist or (much more likely) by the artist’s record company. All radio stations – FM, Internet, satellite, etc – pay royalties to songwriters and/or music publishers through organizations like ASCAP and BMI. The amounts are more or less equal no matter how the song is broadcast.
Terrestrial broadcast stations (AM & FM) in the US pay no royalties to the owners of the performance copyright. Broadcasters have successfully argued for decades that the promotional value of airplay (i.e. the sales generated by radio airplay) more than adequately compensate the copyright holder.
However, in 1995 the lobbying arm of the record industry successfully convinced the US Congress that digital broadcasts were equivalent to providing a “perfect digital copy” of each song played to the listener, and therefore were another matter entirely, and that digital airplay of their copyrighted material would actually reduce, rather than spur, the sales of recorded music, since a large percentage of digital listeners would naturally save that “perfect digital copy” for their own use. Therefore digital broadcasters (Internet, satellite, etc) should be liable for the payment of performance royalties, at a rate to be determined by the US Copyright Office.

Sincerely,

David A. Windham