Most people think of the Library of Congress as a repository of our nation's history. But it also runs the powerful Copyright Royalty Board, which is empowered to make critical determinations on royalty rates paid to music companies and musicians.
Needless to say, billions of dollars are at stake and this week the Royalty Board will gather for testimony to review the current pricing structure for music companies and musicians. For popular Internet streaming sites like Pandora and iHeartRadio and the millions of Americans who enjoy getting their music through the Internet, the board's decision will have a dramatic impact on the future of music.
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The Royalty Board has set rates so high, that more than half of all revenue generated by these sites goes straight out the door in the form of royalty payments. A quick glace at streaming music companies profit and loss statement show they are not awash cash. In fact, Pandora, despite over millions of satisfied listeners, is losing money.
Now a campaign by the music industry is underway to jack up the royalty rates further. Such a decision could be a death knell for the industry.
Why would the music industry be willing to kill off streaming music?
The answer is greed.
The music industry has always been an enemy of technology. Their business model is based on a century-old system and they appear unwilling or unable to change. Some believe that if streaming music goes away, Americans will rush to record stores to buy CDs -- a more profitable venture for big music companies.
The Royalty Board is expected to issue a decision by December. The judges will determine whether consumers will be allowed to continue to enjoy popular music streaming services – or not.
On behalf of the millions of Americans who enjoy streaming music, one can only hope that the Royalty Board does not give into the demands of record industry lobbyists. They should side with consumers, not record company executives, and keep the fees low.
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