How is Web Radio Different from Traditional Radio?

When it comes to radio royalties, there is a significant difference between traditional radio and internet radio. Traditional radio, also known as terrestrial radio, is the AM/FM radio stations that broadcast from land towers. Royalties that apply to over-the-air radio are called public performance royalties. These royalties are for the underlying musical composition – the song itself, the words, and the music or the musical work. These royalties are payable to the publisher and songwriter through your performing rights organization, whether that’s ASCAP, BMI, SESAC, or GM.

But what happens if these terrestrial radio stations also stream their programming over the Internet? Then these broadcasters have to pay non-interactive streaming royalties to SoundExchange for the public digital performance of the sound recording. These digital public performance royalties are paid from SoundExchange to the featured artists on the sound recording, whether that’s a solo artist, a duo, or group. These royalties are also payable to the master rights owner, usually the record label, or to you if you own the master recording.

Currently, terrestrial radio stations do not pay digital performance royalties to artists and record labels, but their internet radio stations do. Or should we say, they’re supposed to. There was legislation introduced to Congress at the end of last year called the AM/FM Act, also known as the Broadcast Performance Royalty, that wants to impose these digital performance royalties or sound recording performance royalties on terrestrial radio stations. We will need to continue to look to see what happens with this new proposed legislation.

So, if you are signed up already to receive either one of these royalties, here is what you should know: royalties from traditional or terrestrial radio stations go to publishers and songwriters, while royalties from internet radio stations go to artists and master rights owners or record labels.

It’s essential to understand the difference between traditional and internet radio royalties as an artist or publisher. Knowing where your royalties are coming from and how they are being distributed will help you make informed decisions about your music business.

In conclusion, while traditional radio and internet radio may seem similar, the royalties they pay out are quite different. It’s essential to stay informed about any new legislation or changes in the industry that may impact your royalties and revenue streams.