The Value of Internet Radio to Independent Artists
You would be hard pressed to come up with a medium that played a more important role in keeping the music of independent artists relevant and alive during the pandemic than internet radio.
Think about it.
Sure there was Spotify and the other online streaming services. But did any of them offer free advertising to artists through social media? All over Twitter, Facebook and Instagram, Internet Radio stations were promoting indie artists through playlists, achievement awards and influencer charts. Sure, some may have charged for these services, but the vast majority offered them for free as part of their station promotions.
The sad part is through all the airplay, advertising and social media posts, the majority of internet radio stations cannot generate the type of revenue needed to maintain the licensing necessary to insure artist, songwriters and publishers get paid what's due to them based on airplay. So they operate, testing fate that they will not get caught for copyright infringement by any of the major performing rights organizations (BMI. ASCAP or Soundexchange).
But, before you cast aspersions, consider this.....music licensing fees can cost independent radio stations between $1500 to $2000 per year. Many stations do not generate this amount of revenue.
For now I'll refer to them as challenged stations.
Even when fully licensed, indie artists whose music is played on challenged stations will see little to no royalties for airplay because royalty payouts are determined by the combined revenues of all the stations that play your music. So, while the performance rights organizations are collecting the fees, little to nothing is being passed on to the artists.
One well-known indie artist revealed to me that out of dozen of internet stations that played her music during 2020, only one reported airplay to BMI.
This resulted in a royalty payout of $1.68 for the year.
So, what are the performing rights organizations doing with all the licensing fees, especially those collected from independent internet radio stations?
We'll look into that in our next blog.