As of June 1, KSBJ has discontinued our Internet broadcast due to skyrocketing Internet Licensing Fees Imposed by Record Labels

WHAT IS HAPPENING?
KSBJ, YOUR radio ministry, is experiencing an industry-wide struggle that is affecting your ability to listen to KSBJ via the Internet stream.

WHY IS THIS HAPPENING?

For decades, radio stations like KSBJ have enjoyed a mutually beneficial relationship with musicians and record labels. We play the songs, talk to the artists about their ministry and  help them reach hundreds of thousands of listeners with their songs. The artists’ careers and ministries benefit from the free promotion KSBJ gives them. They sell CD’s and downloads, merchandise and concert tickets – all because of the radio and the free platform our voice provides.

BUT SOMETHING HAS HAPPENED…..

The ‘digital age’ changed the traditional business model the recording industry operated from. Digital downloads began to replace CD’s as the consumers’ choice. But rather than embracing this new model and finding a way to re-invent their business, record labels clung to the old way of doing things. They missed a number of opportunities to capitalize on technology and are now facing an uncertain financial future because of devalued CD sales.

Today, the record labels are looking to their old “partner,” radio, and trying to recoup their financial loss from us. They’re asking stations like KSBJ to pay new, and higher, licensing fees for every song we play over the airwaves. We’re already paying composers and publishers for playing their songs, plus we’re paying the record labels for the right to play their music on the Internet. The system that has equitably served radio and records, for more than 80 years (free airplay for free promotion) now, doesn’t seem to be enough for the record labels.

WHAT ARE THE FACTS?
Because of the shift in the record label business model to find additional revenue streams resulting from the devaluing of CD sales, there are TWO very important issues that affect KSBJ and YOU.

Internet Licensing:

• KSBJ is required to pay fees to artists for broadcasting on the Internet
• Over the past four years these fees have increased 1,000 %, which KSBJ has paid with the expectation that the Internet Licensing Fees would be renegotiated and return to the original lower rates
• The rate not only hit KSBJ, but ALL radio stations
• At the request of Congress, fair rate negotiations have been secured between the record labels for mainstream radio and public radio and others BUT NOT FOR CHRISTIAN RADIO
• Because of the accelerated rate increases, KSBJ’s funding for paying our current internet licensing fees ran out as of May 31
• KSBJ along with other Christian broadcasters have submitted a proposal for internet streaming rates to the record labels that has not been agreed upon
• KSBJ is paying higher internet streaming rates than commercial radio stations who can recover costs by selling advertising, which as a non-commercial we cannot do

Performance Tax:

• Record labels are asking Congress to impose a fee (aka performance tax) on radio stations every time a song is played over the airwaves
• The tax would cripple radio stations because it adds another high fee to broadcast in what are already difficult economic times
• Ultimately this tax would make Christian music more difficult to deliver and could cause other Christian radio stations across the nation to go off the air
• Many members of congress are currently supporting the radio industry and are against the performance tax

CURRENT STATUS OF NEGOTIATIONS:

1. KSBJ has tried to continue discussions with the record labels regarding Internet License Fees, but now the labels say that they will not settle with Christian radio until the Performance Tax issue is resolved.  To us, that seems unconscionable!  Mainstream commercial radio and public radio did not have to clear that hurdle to settle, but now we do!
2. Legislation has been introduced into Congress that will require record labels to renegotiate with Christian radio

WHAT IS KSBJ’s STAND?

• KSBJ  has given prayerful consideration to this very serious decision to cease our internet stream. We realize the importance of the ministry that comes from broadcasting on the internet and are working diligently and prayerfully to resolve this manner as quickly as possible.
• We REFUSE to be forced into a position to pay performance taxes in exchange for lower internet streaming rates 
• We do not feel it is right to pay internet licensing fees that are higher than commercial and public broadcast radio stations
• It is KSBJ's belief that we have a mutually beneficial relationship between us and the labels and that performance tax is not necessary
• It is important to KSBJ that we manage YOUR funding for  this ministry in a responsible manner even when it comes to working within the Christian music industry
• If the record labels work with Christian radio to renegotiate these licensing fees, we’ll once again be able to broadcast KSBJ live on the Internet

WHAT CAN BE DONE?

• KSBJ has proposed an agreement to the record label representatives working to resolve the negotiations regarding Internet Licensing Fees
• KSBJ has contacted our congressman to express our position on the Internet Licensing Fees as well as the Performance Tax
• You can contact your congressman and tell them to encourage record labels to renegotiate Internet License Fees with Christian radio and to oppose the proposed Performance Tax currently being presented to Congress, click here, to find out who the representative is in your area
• PRAY!!! We know that God listens and that this matter will be resolved

Resource from Christian Radiowww.freedomtobroadcast.com

Resource from Mainstream Radiowww.noperformancetax.org

A LETTER FROM KSBJ PRESIDENT AND GENERAL MANAGER, 
TIM MC DERMOTT

Dear Valued KSBJ Listener:

As of June 1, 2009, 89.3 KSBJ has discontinued streaming radio.  We understand that many of you enjoy listening online while at work and at home; however, escalating Internet licensing fees for non-commercial Christian radio stations is forcing KSBJ to discontinue Internet broadcasting.  

KSBJ is required to pay fees to artists for broadcasting on the Internet.  Recently, these licensing fees have dramatically increased 1,000 % what they were just a few years ago.  Christian broadcasters have united to renegotiate these rates.  As it now stands, KSBJ is paying more to broadcast on the Internet than commercial stations do.   While we are strong advocates of the ministry impact that being on the Internet has for KSBJ both locally and around the world, we also have a stewardship responsibility for how we use the monies you’ve entrusted to us.   As a non-profit ministry, we don’t believe it’s fair for KSBJ to pay these high rates, nor do we believe it’s fair to ask you, our listeners, to bear the burden.

As of June 1, KSBJ has discontinued broadcasting via the Internet, until an agreement can be made. Negotiations are continuing with the record labels to lower these rates.  Legislation has been introduced in Congress to help KSBJ and other non-commercial Christian stations get this matter settled fairly.  With Sharathon approaching, we have budgeted an amount that we believe is a good level of stewardship for broadcasting on the Internet.  If we are able to renegotiate these licensing fees, we’ll once again be able to broadcast KSBJ live on the Internet.  However, if the rates continue at their current high level, then we will use those funds for other projects.

This decision is not made lightly, as we realize the importance of the ministry that comes from KSBJ broadcasting on the Internet.   We receive e-mails every day from listeners across the U.S. and around the world who share with us what this ministry means to them. Though we’ve prayed diligently about this, our hearts are still quite heavy.  However, we believe this is the right decision.  We ask you to join your prayers with ours as we ask God to bring resolution to this matter.   

God listens.

Tim McDermott
KSBJ President and General Manager