Agreement reached on Internet music royalty rates

A group that collects royalties for music artists and recording companies has agreed to reduce rates for thousands of commercial radio stations that also play songs over the Internet.

Internet radio station operators had complained that rates originally set by the federal Copyright Royalty Board in 2007 could essentially force them to shut down.

The new deal lowers those rates by about 16% in 2009 and 2010. The stations will now pay $1.50 for every song heard by 1,000 listeners in 2009, rising to $2.50 per 1,000 listeners in 2015.

The agreement between the National Assn. of Broadcasters and the royalty-collection group SoundExchange covers the Internet streaming operations at several thousand NAB-member stations, including those owned by Clear Channel Communications Inc. and CBS Corp.

Stations that are not members of the broadcasters’ group have the option of joining the agreement, according to the NAB.

SoundExchange Executive Director John Simson said Tuesday that the agreement brought certainty to his group and the NAB about what the rates were.

“It also reinforces the value of our recordings for the artist and copyright owners over the course of the term,” he said.

In a statement, NAB spokesman Dennis Wharton said the deal ensured that U.S. radio stations could continue to stream music over the Internet and “further strengthens the relationship between free, local radio and our 235 million weekly listeners.”