In a press release issued last week, Cambridge Consultants announced that it would be introducing at the Consumer Electronics Show a wireless Internet radio device that would cost less than $15 to manufacture, and would likely retail for around $50. While several articles have hailed this device as signaling the demise of both satellite and over-the-air radio as consumers get inexpensive access to hundreds or thousands of Internet Radio stations, not one article that I've seen addresses the issue of whether these stations will be around to listen to, after the new royalties are announced for the use of sound recordings on the Internet. Briefs are due to be filed with the Copyright Royalty Board this week, summarizing the evidence that has been received over the past year in the proceeding that has been ongoing to determine these rates. By March 1, the Board should announce a decision.
We have summarized the rates on which Internet Radio companies should be paying royalties in our memo, here, but noted that these royalties actually expired as of the end of 2005. Royalties for this year, and the upcoming years through 2010, will be decided by the Board in the current proceeding. This proceeding, which could well determine the fate of many Internet Radio stations - and perhaps of the devices designed to listen to them - bears careful monitoring.