URGENT: Save Streaming Radio Innovation - Five-Year Window Closing

Right now, as you read this, the Copyright Royalty Board is working to set streaming radio licensing rates for 2026-2030. This happens only once every five years. Miss this window, and we're locked into an anti-business licensing model until 2030.

The Crisis Killing Innovation: SoundExchange's Unfair Pricing Model

After 25 years of data, the economics are undeniable: current streaming radio licensing creates an impossible business model that kills innovation before it starts. The primary culprit is SoundExchange, the organization that collects digital performance royalties for streaming radio. Their pricing structure is fundamentally unfair to small streaming operations and makes sustainable business growth nearly impossible.

Here's the current model: You grow your listener base, but with ad rates in the streaming market averaging just $15 per thousand impressions, there’s little to no revenue. Meanwhile, your licensing costs increase with every new listener. The result? The more successful you are, the faster you go underwater—until the costs become unsustainable and you're forced to shut down. This isn’t a viable business model; it’s a system built to fail.

Further, here is some devastating math: equipment to start streaming globally costs $500-2,000, but SoundExchange's annual licensing minimums run $1,000-4,000 or more per station, regardless of whether a station generates any revenue. Again the result? A growth penalty where gaining more listeners literally costs more than the revenue they generate and shuts you down.

SoundExchange's one-size-fits-all pricing ignores the basic reality that small streaming stations operate on completely different economics than major platforms like Pandora or Spotify, or even terrestrial stations which are not handicapped by SoundExchange pricing at all.

A startup streaming station with 100 listeners pays nearly the same base rates as a platform with millions of listeners, but has little to no opportunity for revenue. This creates an insurmountable barrier that has nothing to do with a station's actual ability to pay or revenue generated.

This anti-business model gets worse as SoundExchange continues to increase rates without regard for market realities. Digital advertising rates continue declining due to competition from Google, Meta, and TikTok, while SoundExchange rates increase annually with cost-of-living adjustments. Technology costs drop, making global broadcasting easier and cheaper for new businesses to emerge, but SoundExchange's minimum licensing fees create ever-higher barriers to entry and kills the innovation. The organization's pricing structure treats streaming radio like a mature, profitable industry when the reality is that most small operators struggle to generate any meaningful revenue.

The evidence is overwhelming that this system doesn't work. Live365 succeeded by bundling licensing costs, proving the market exists when barriers are removed. Thousands of "pirate" stations operate illegally, showing demand far exceeds legal options. Every other digital media sector thrived with lower barriers to entry, while streaming radio remains trapped in an outdated regulatory framework.

International markets demonstrate that flexible licensing structures enable innovation without harming artists or rights holders. Meanwhile, America's streaming radio sector stagnates under a system that makes it nearly impossible for entrepreneurs to build sustainable businesses.

What We Need: Fair SoundExchange Pricing Based on Financial Reality

We need licensing mechanisms similar to what enabled terrestrial radio to flourish - structures that allowed entrepreneurs to start small and scale profitably. Most critically, SoundExchange must abandon their unfair flat-rate pricing model in favor of revenue-based licensing that reflects a station's actual financial performance.

SoundExchange pricing should be based on a station's profit and loss (P&L) model, not arbitrary minimums that ignore business reality. Small streaming startups should pay based on their actual revenue and profitability, just like any reasonable business expense. This would create affordable startup costs for entrepreneurs, profitable scaling where growing audiences increase revenue faster than costs, and innovation incentives where success leads to sustainability, not bankruptcy.

A fair P&L-based system would allow streaming stations to pay what they can actually afford while still compensating artists appropriately. Stations generating $500 in annual revenue shouldn't face the same licensing costs as platforms generating tens of thousands. This isn't about paying artists less - it's about creating a system where streaming radio businesses can actually succeed and generate sustainable revenue streams for everyone involved.

The Perfect Storm for Reform

Multiple factors align to make this the critical moment for change. The economic crisis has made venture funding scarce for startups while increasing demand for affordable business opportunities. Remote work creates new location-independent broadcasting opportunities. Politically, there's bipartisan support for small business and entrepreneurship, with anti-monopoly sentiment spanning the political spectrum.

Technologically, the case for reform has never been stronger. Streaming now generates 84% of music industry revenue, 95% of Americans have high-speed internet access, and cloud technology makes global broadcasting trivial. The "experimental" excuse for restrictive licensing is gone - streaming is the mainstream music industry.

The Stakes: Innovation or Monopoly

If we act now during this regulatory window, streaming radio becomes a vibrant ecosystem of diverse voices and innovative programming. If we wait until 2030, the current anti-business structure becomes permanently entrenched, digital advertising becomes even more competitive, big platforms gain insurmountable market control, and innovation opportunities pass to other countries.

This isn't just about fixing rates. This is about whether American innovation and entrepreneurship will be allowed to flourish in digital media, or whether regulatory inertia will hand the future to incumbent monopolies.

The choice is simple: Act now to reform SoundExchange's anti-business pricing during the CRB proceeding, or accept another five years of a system that kills streaming innovation before it starts.

Payment

If you would like to help fund us for this initiative, please sign this petition and then go to https://www.gofundme.com/f/streaming-radio-music-licensing-reform. When you sign up, your name will be added to a petition we’ll present to lawmakers. You’ll also receive email templates and contact information so you can share your thoughts directly with key decision-makers. We’re not seeking major financial support—just enough to sustain a focused, grassroots campaign.