Deal Reached On Internet Radio Royalty Rates

by Robin Hilton

After two years of wrangling, the government-run Copyright Royalty Board and Internet radio stations have reached a deal that should help keep Pandora and other popular, Web-based music sites on the virtual air.

Under the agreement announced yesterday, online music sites will pay copyright holders up to 25 percent of any money they make. Pandora founder Tim Westergren tells the Associated Press, "It's hard to overstate how significant this is."

Two years ago, the Copyright Royalty Board ordered dramatic increases in the fees music sites pay to use songs. At the time, Pandora and other sites said it would eat up as much as 70 percent of their revenue and drive them out of business.

Though the new agreement will keep Pandora and other sites running, some will still have to change their business model. Pandora users will now only be able to listen to 40 hours of music per month. If they go over that, they'll be given the option of paying 99 cents for unlimited access for the rest of the month.

Does this seem like a reasonable deal to you? How much do you rely on Internet-only radio stations for hearing music?

9:22 PM ET | 07- 7-2009 | permalink

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