CRB Royalty Increase Prompts Closure Of SmoothJazzChicago.net

Rick O'Dell

It looks like the recently revised COPYRIGHT ROYALTY BOARD (CRB) royalty rate for pureplay webcasters has claimed its first victim, as predicted by some in the webcasting community (NET NEWS, 12/23). CHICAGO radio vet RICK O'DELL will shut down his website and online radio station, SMOOTHJAZZCHICAGO.NET  on THURSDAY, DECEMBER 31st, CHICAGORADIOANDMEDIA.COM reports.

O'DELL cited two reasons fro the shuttering -- the royalty rates and his other job as PD for WRME-LP/87.7 MeTV FM. "Sadly, when you combine the two factors, the diminishing amount of available time to maintain the quality of SJC at a level I feel our listeners deserve and the increasing expenses related to performance royalties, there is no longer any uncertainty about the decision I have to make," he said. "I cannot continue to operate SMOOTHJAZZCHICAGO. With a heavy heart, I have decided to shut down the station on DECEMBER 31st, 2015.

"I realize this is a major disappointment to all of us, and I regret having to do this," he continued. "We've grown more than 300% since we launched back in NOVEMBER of 2012, and the arrow was still pointing up. The support we've gotten from listeners and artists has been extremely gratifying. We proved the audience for Smooth Jazz music is still large and vibrant. SMOOTHJAZZCHICAGO.NET has been a lot of fun -- I only wish it could've gone on longer."

But the bottom line was this: "Yes, the royalty rate increase was the deciding factor in closing down SMOOTHJAZZCHICAGO.NET. I truly was on the fence about it until the announcement came down from the COPYRIGHT ROYALTY BOARD. We're actually kind of a victim of our growth over the past three years. We've gone up in the rate tiers for both streaming and royalty payments because our audience has grown. Unlike the case of terrestrial radio, additional listeners in Internet radio cost you money, because you need to increase your bandwidth once you reach certain thresholds. On top of that, royalties also go up when you increase your total listening hours and revenue. It's a tough hill to climb. We were doing OK, but as a pureplay webcaster, there was no way we could overcome the significant increase in the royalty rate come JANUARY 1st, 2016."

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