Does your internet radio station need a license?
If you're planning to stream commercial music, also known as "mainstream music", that is a must to possess a license from authorities. The big record labels and popular world artists work with companies that collect revenue from streaming services online like internet radios.
The license authorities vary from country to country and their license also operates for particular areas. For example, the authorities in the USA cover only listeners from the United States. If you need for globe scope, then you have to license from multiple sources.
Choosing a license solely rests on where you intend to broadcast audio, for instance, if your audience is in the UK then you have to use PPL and PRS.
Well, it seems complicated and probably is, especially if you're demanding of international exposure.
Webcast License guarantees legal streaming commercial music on internet radio.
Understanding of license process
PRS, short for Performing Rights Society represents the interests of its members who compose and write the music and lyrics.
PRS for Music collects and distributes money on behalf of songwriters, composers, and music publishers
PPL, short for Phonographic Performance Limited represents the actual recording of the music i.e. all the musicians who performed on the recording of the music.
PPL collects and distributes money on behalf of performers and record companies for the use of their recorded music.
Together these organizations collect revenue from businesses when their music is played in a public space such as internet radios and then share the returns as royalties to their members.
Therefore, you need to have a license from both. Well, there are countries where the organization is combining PRS and PPL like Canada and France.
United States - Licenses
ASCAP (American Society of Composers, Authors, and Publishers), BMI (Broadcast Music, Inc.) and SESAC are US public performance organizations (PROs) who collect publishing royalties (performance royalties) for the PUBLIC PERFORMANCE of musical works as stipulated by the U.S. Copyright Act.
SoundExchange is a US public performance organization (PRO) who collects royalties for DIGITAL PUBLIC PERFORMANCE of sound recordings stipulated by the Digital Performance Right in Sound Recording Act of 1995 and Digital Millennium Copyright Act of 1998.
As an internet radio, you have to contract with ASCAP, BMI and Sound Exchange.
The license covers only listeners from the United States.
Commercial Webcasters (Internet Radio) should pay an annual minimum fee of $500 to SoundExchange. Also, $0.0018 per performance (streaming a song) is the rate in 2020. If you play out 12 songs per hour, you'll stream about 288 songs per day and an additional fee of $.50 required. As a summary, you have to pay about $515 per year.
Moving on to the ASCAP. There are many factors that have to be taken into to determine how much an ASCAP license costs. First of all, there’s a different way to calculate the rate for each different type of establishment. Broadcasting Internet radio is considered a $352 annual fee.