---
layout: article
title: Rights and Royalties
category: manager
---

If you're new to broadcasting, or have not streamed your station online before,
reading the following brief explanation of compensation rules for songwriters,
musicians and other copyright holders may save you a great deal of trouble
later.

Independent music radio on the Internet has faced royalty demands from
SoundExchange in the USA, and similar organizations in other territories. These
organizations are usually membership societies or government-sanctioned national
authorities which are intended to collect money from broadcasters to compensate
copyright holders. The royalty collection societies require payment before you
can stream just about any music released commercially to the general public -
whether you make any money out of streaming, or not. It's not so much the
percentage of revenue demanded, but that there are usually annual minimum fees
to pay, which can hurt small stations disproportionately.

For example, in the UK, the MCPS-PRS Limited Online Music Licence covers
non-commercial music streaming by groups and individuals, as long as their gross
revenue is less then £12,500 per year. The cost is on a sliding scale, up to
£1,120 plus 20% tax per year for delivering up to 450,000 individual streams or
serving 25,000 files; after that, you have to apply for a full MCPS-PRS Online
Music Licence. That doesn't sound too bad at first, but 25,000 files per year
works out at less than four downloads per hour for a round-the-clock website.
This particular licence only covers publishing (songwriter) rights, not
recording (record label and musician's performance) rights, so you have to
negotiate an additional licence from Phonographic Performance Limited (PPL) to
play music online, including digital recordings converted from commercially
released CDs, vinyl or tape.

Typically, you have to provide full statistical details to the royalty society
of all music streamed or downloaded from your site, which can be onerous. Even
if your radio station is mostly speech, there are many limitations in the small
print of these music licences. For instance, you can't use music for
promotional purposes, and you can't stream a whole opera, without negotiating
separate licences. Weirdly, you are not allowed to play a piece of music in a
'derogatory context' to the writer or performers; no drummer jokes allowed,
then.

However, the biggest pitfall is that these MCPS-PRS licences for publishing
rights only cover listeners in the UK. For recording rights, PPL is a member of
the IFPI reciprocal scheme for webcasters, which means its licenses cover
listeners in some European countries, Australia, New Zealand and a few other
countries, but not listeners in the USA or Canada. So if your Internet station
picked up a significant number of listeners in countries not covered by the
MCPS-PRS licences or the IFPI reciprocal scheme, you would have to pay for
similar music licences in those countries as well. It's no wonder that many
not-for-profit radio stations have disappeared from the virtual airwaves over
the last few years, since not having the right licences could leave the operator
liable to legal action.

If you want to go down the commercial music route, check out the
<http://www.prsformusic.com> and <http://www.ppluk.com> websites for UK licence
details. In the USA, the <http://www.soundexchange.com> website currently quotes
a 500 dollar minimum annual fee for non-commercial webcasters, plus a usage fee
above a certain number of listener hours, for the right to stream music
recordings to listeners. See the websites of [ASCAP](http://www.ascap.com),
[BMI](http://www.bmi.com) and [SESAC](http://www.sesac.com) for details of music
publishing royalties payable by webcasters streaming to the USA.

Free content streaming offers an alternative for DIY Internet radio. Since
royalty collection societies like MCPS-PRS and SoundExchange can only represent
the interests of their own members, it follows that if you are not a member, you
can stream your own self-produced content without paying for their licences. If
you state somewhere on your website that the stream is of your own copyrighted
material, and is made available to the public under a specific licence, then
no-one should misunderstand your intentions.

You might be able to persuade other people to allow you to stream their content
too, as long as they do not have a conflicting legal obligation, such as having
previously joined one of the many royalty collection societies around the world.
You can ask for permission to stream when website visitors upload their own
music files to you via a HTML form, much as the likes of SoundCloud do. Or you
can collect files licensed under an appropriate Creative Commons licence
(<http://www.creativecommons.org>) or other free content licence.

Explicit permission to stream on your particular server is always going to be
the ideal, so think about your own terms and conditions before you accept files
from third parties for streaming. How, for example, would you know if someone
uploaded a file to your online radio station that unknown to you, had been
ripped from a commercially released CD? That's the kind of thing that could get
you in trouble with the licensing authorities and copyright holders.
