Why do internet radio stations have to pay in the first place?
It’s all because of the Digital Performance Right in Sound Recordings Act of 1995 (aka the DPRA). Over the air broadcasters have always been exempt from playing royalties on the “Sound Recording Copyright”. When the original copyright laws were written, congress realized that they were giving an legal monopoly to the copyright holder. So in order to balance out that government-given monopoly, they also added provisions for fair use; such as copying for personal use, exemptions for libraries, and exemptions for radio broadcasters. The DRPA removed these exemptions for digital broadcasts, under the premise that digital allows unlimited perfect digital copies of the original work. But we’re not distributing perfect digital copies of the original copyrighted performance, MP3 and WMA broadcasts are drastically compressed and (I’m sure you know) no where near a perfect digital copy. And we segue tracks together, talk over the beginnings and end, etc. Just like traditional over-the-air radio.
