A recent ruling from the Copyright Arbitration Royalty Panel (CARP) that
mandates Webcasters to pay sound recording performance royalties has forced
Internet-only Webcaster MediAmazing to
turn off its free streams and implement a subscription-based model.
The CARP recommendation, which is likely to be accepted by the Library of Congress Copyright
Office, calls for Webcasters and commercial broadcasters to pay royalty fees
on broadcasts. It will undoubtedly force a dramatic shift for streaming
media companies offering free Webcasts.
The Nazareth, Pa.-based MediAmazing, a top-rated Webcaster which depended on
advertising to subsidize its free service, quietly reacted to the ruling by
shutting off the free service and asking subscribers to pony up $3.95 a
month ($35.55 per year) to listen to a commercial-free version.
MediAmazing officials could not be reached at press time but Kurt Hanson,
publisher of the Radio And Internet
Newsletter that tracks the Webcasting industry, said that by switching
to a paid subscription model, MediAmazing would be subjected to the royalty
rate, which is yet to be determined.
“However, that will not eliminate MediAmazing’s obligation for retroactive
royalties which would be, $16,000 for January 2002 alone and overall could
be a quarter million dollars or more — probably more than 100 percent of
the company’s total gross revenues to date,” Hanson said on his Web site.
According to Measurecast and Arbitron ratings, MediAmazing was among the
most listened to audio streams on the Internet but a combination of the
depressed online advertising market and the latest copyright ruling has
caused some worry among company executives.
The news of MediAmazing’s paid subscription shift comes as a new a new
audience measurement survey has painted a rosy picture of the streaming media sector, suggesting that a
lucrative market is ripe for the picking.
The joint study by Arbitron Inc. and Edison Media Research said
approximately nine million consumers would be willing to pay a small fee to
listen their favorite audio channel.
