So, you want to run an internet radio station?
It's easy to produce the audio. It might seem easy to sound just as good as the other radio stations, too. But you need to ensure you have the proper licences. Internet Radio broadcasters that have music as a part of their programming need to have licences from the owners of the copyright in both the recordings that they play and in the underlying songs.
You will probably need to have at least two licences. For many situations (if you plan to make radio advertisements, for example) you'll need to investigate further licences as well.
PRS for Music
This organisation represent the performers and publishers of the work. They offer two sets of licences: first, a limited online exploitation licence, which is for people earning less than £12,500 a year from online use of music (and a maximum usage). Annual licence fees start from £122 + VAT.
If you're earning more than that, PRS have a set of licences called "LOML+", which are aimed at people who are larger operators; and then their full online music licences. The full licence starts at 0.05p per song per listener.
PPL
PPL represents the record companies, and therefore the recordings you'd like to use. Again, they start with a small radio service licence, which costs £195.05 + VAT, but is intended for people who are making less than £5,000 from online music (and no more than 270,000 total song streams per year).
For larger broadcasters, PPL have a larger, standard, radio service. This full licence starts, for a commercial radio service, at 0.0722p per song per listener.
Total costs
So, total costs for a licence to run a large(ish) radio station online are 0.1222 per song, per listener. If you assume 12 songs an hour, that figure is just under 1.5p per listener, per hour - to which you need, of course, to add your bandwidth costs (and your own staff time). To put it into context: in Q4 2012, Absolute Radio 90s had 436,000 listeners a week. In total, listeners tune in for 4.7 hours each, meaning a total of 2,039,000 listener hours per week. If this were only an online radio station, the music costs would be £30,580 a week, or £1,590,420 per annum.
As you might guess from the above, it might be cheaper to actually broadcast your radio station on DAB as well as online: there's space available, and that makes your music costs a straight percentage of your revenue (currently around 10.5%). Absolute 90s is unlikely to bring in £16m per annum by itself.
Licences for an internet radio station
Pirate radio's all very well: but if you want to broadcast legally on the internet, you'll need the right licences.
9 comments
Steve Campen posted on Thursday 28th March at 19:44
Also the thorny question of geo-locking. When I managed LBC’s podcasting this was not a real problem until we included music in the show. In theory if you stream or allow your downloads to be accessed in other countries you will need to pay their copyright fees if you are playing music. If you have ever visited an American TV site to be told ‘content not available in your country’ – that’s geo-locking. OR – Find a country that hasn’t signed The Berne Convention on copyright and base yourself there.. god knows the weather would be better!
James Cridland posted on Thursday 28th March at 19:51
The “hosting yourself abroad” trick doesn’t work, unless you are actually based there – physically and financially. Which means you can’t quite operate the station the way you want.
But you’re right: the above licences only cover you for use in the UK. (This is not the same as “you must geo-block” – PRS and PPL have no authority outside the UK, and they can’t tell you what to do outside. That said, you may get threatening letters from the other collection agencies.)
Steve Campen posted on Thursday 28th March at 20:01
I have remembered why Chrysalis Radio insisted on geo-locking – they owned music publishers in a number of other countries and I think they were worried that an internal tiff might ensue. And I was thinking of the moving abroad trick as, er moving abroad – the weather is usually better and the booze cheaper. (My friend who ran an FM station somewhere in Europe upped his power from the regulatory 1KW to 10KW as the country in question had no measuring equipment for radiated power… and the transmitter was on a hillside in the middle of an up-market villas complex!)
Glynes Mewton posted on Saturday 29th June at 13:19
What if the music you intended to you use was royalty free??? would i still need a license?
thank you
G
Denis Bourne posted on Wednesday 3rd July at 07:09
I don’t think there is such a thing as royalty free music, as the artist will nearly always want to hold onto the ownership to make some money from downloads or CDs.
Stations like Amazing or BBC Introducing can get permission from each unsigned artist to play or stream music without a fee for promotion, but looks a lot of work to get enough music to fill a 24hour station.
Juan Ortiz posted on Friday 5th July at 00:55
One thing I really want to know. Do I really need a permit to run an Internet radio station. I current hold a recording permit in the uk now I’m looking to start a radio station can somebody really tell me exactly how it work? Thanks.
Sara LuvsPoking Avila posted last Thursday at 16:50
Sorry if I’m being dumb here but when you say about broadcasting on dab making your licence cost a straight percentage of your revenue, do you mean after all expenses and deductions have been paid?
Paul Easton posted last Thursday at 19:11
Sorry if I’m being dumb here but when you say about broadcasting on dab making your licence cost a straight percentage of your revenue, do you mean after all expenses and deductions have been paid?
The cost of PRS and PPL licences for commercial stations broadcasting on DAB, FM, AM, satellite or cable is between 2.5% – 5,25% of ‘Net Broadcast Revenue’ depending on which revenue band the station/group falls – with a minimum annual payment (currently £891 per station).
Unlike the rates for online stations this is not ‘pay per play’ but ‘all you can eat’.
From the PRS for Music Website
The definition of Net Broadcasting Revenue is 85% of the gross valuable consideration (before any deduction of agency commissions or any other deductions) whether in money, or money’s worth derived and received by the Licensee from broadcasts pursuant to this Licence including, advertising sponsorship, subscriptions, donations, barter and contra deals, and other revenue directly related to the programmes broadcast.
External cost directly and reasonably incurred by the licensee in producing sponsored Outside Broadcast events may be deducted, providing that if such costs exceed the value of the sponsorship revenue the value of the said sponsorship revenue shall be nil. The amount by which such costs exceed sponsorship revenue may not be set off against other non-sponsorship revenue.
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I currently run my own internet radio station www.ravedance.net and thought it would be good to check what licence i would need. Thanks 4 the info