Internet Radio & Music Royalties
This is a mind-numbingly complex subject that only a handful of attorneys really understand, so we're not even going to attempt a comprehensive explanation.

The critical piece is that Internet stations like Radio Paradise pay a royalty to performers and record labels — a royalty that broadcast stations in the US do not pay — and the amount we pay for the use of recorded music increased by about 300% at the beginning of 2016. As you might expect, this has been quite challenging.

In the most recent ruling by the Copyright Royalty Board — the panel appointed by the US Congress to set these rates — the option for smaller Internet stations like RP to pay royalties based on a percentage of our income was eliminated. Instead, we must now pay royalties based on the number of people who hear each song. Large companies like Pandora have always paid that way (largely through infusions of cash from investors), and are more prepared to handle the new rates. For stations like RP, the change is much more dramatic and challenging.

Many stations have responded to this change by drastically limiting the number of people who can listen, by increasing the number of ads they run, or by ceasing operation entirely.

Here at Radio Paradise, we're confident that — with the support of loyal listeners like you — we can meet this challenge.
Why RP but not FM?
US-based broadcast stations are pretty much the only stations who don't pay royalties to performers and record labels. Broadcasters elsewhere (with a few exceptions like China, Cuba, Myanmar, and North Korea) pay these fees (called "performance royalties"). So do satellite and cable stations (including those in the US).

Why? Because since the 1940s the US broadcast industry has successfully lobbied Congress for an exemption, based on the promotional value of radio airplay — an argument that carries less weight than ever these days, as the sales of recorded music collapse.

Back in the 1990s, this inequity led the music industry to successfully push for hefty performance royalty payments by digital services like Internet and satellite radio. This dueling deployment of lobbying power has led to a situation where one group of services pays less than they should (zero, in fact) and another group (including RP) pays substantially more than their fair share.

A more equitable arrangement would be something like the situation with songwriting royalties, where all types of stations — FM, Internet, satellite and cable — pay an approximately equal royalty, based on their income. There is an organized push for such a performance royalty structure (by folks like the MusicFirst Coalition) that we fully support.
Don't Performers Deserve to Get Paid?
Absolutely. We feel that all radio stations should pay for the use of music.

One of the best features of current US copyright law is the requirement that the collection agency (SoundExchange) pay 50% of the royalties collected directly to the performers on a given recording, even if they signed away their rights to royalties on vinyl & CD sales to their record company (as most of them were forced to do in the past, often for just a pittance).

You might have heard about the issue with royalties on pre-1972 recordings. Some companies (Pandora, for example) have chosen to utilize a loophole in copyright law to avoid paying royalties on recordings released prior to 1972. We do not. We think that Aretha Franklin and the Dead deserve royalties as much as Radiohead or The Shins do.

When you support Radio Paradise, a substantial portion (currently a very substantial portion) of what you send us goes directly to the artists we play. We think that's pretty cool.