Each year, Internet radio stations must pay a minimum fee to SoundExchange, and that fee is due by January 31. These minimum fees are applied against the obligations of a Internet radio service to pay royalties for the use of sound recordings on their stations. SoundExchange does not send bills, so webcasters must remember, on their own, to make the payments. For commercial webcasters (including broadcasters who stream their signals on the Internet), under the Copyright Royalty Board decision released last March, a minimum fee of $500 per channel is due. While SoundExchange and certain large webcasters agreed to cap this minimum fee liability at $50,000 no matter how many channels a webcaster transmits (see our post here), this agreement has yet to be submitted to the CRB for approval. Minimum payments are also due from noncommercial and small webcasters.
Under the CRB decision, noncommercial webcasters also owe a minimum fee of $500 per channel. Small webcasters, who earlier this year accepted the SoundExchange offer about which we wrote here, owe a minimum fee of $2000 if they had 2007 revenues of less than $50,000, and minimum fees of $5000 if their 2007 revenues exceeded $50,000. Note that details about these minimums are difficult to locate on the SoundExchange website. Nevertheless, the current rules require that these payments be made. Future settlement negotiations may adjust some of these minimums but, as of this moment, the failure to pay the minimum fees could, at a minimum, subject an Internet radio service to penalty fees and interest payments.