Christian Radio Sues Over Disparity in Streaming Costs

The website for 99.1 KLJY JOY FM in St. Louis features a scrolling playlist of its lineup of Christian pop music and a “listen now” button to tune in to the simulcast broadcast. But visitors may find that after a few hours of streaming artists like Lauren Daigle and Brandon Lake, the site may kick listeners  off.

Because of higher royalty costs, many noncommercial religious broadcasters are choosing to either limit the number of online listeners they allow at a time or simply not promote their online platforms at all. A new lawsuit from some of these broadcasters, including many Christian stations, claims that their royalty rate, which exceeds what other stations pay, is effectively a form of religious discrimination.

“The government is charging religious broadcasters a significantly higher rate,” said Rory Gray, with the Alliance Defending Freedom (ADF). “It suppresses religious speech in the public sphere.”

Noncommercial radio stations—which rely on listener support and grant funding rather than ad sales—have traditionally been able to negotiate lower royalty rates for the music they play. But religious broadcasters, like JOY FM’s owner, Gateway Creative Broadcasting, lost out on that deal during negotiations in 2016 with SoundExchange, the rights management company that distributes royalties to artists.

Then streaming costs for religious radio increased in 2021, following a ruling from the US Copyright Royalty Board (CRB), and Christian stations were subject to the standard rates. A suit filed in February against the board claims that due to the discrepancy in rates set by the CRB and privately negotiated rates, noncommercial religious broadcasters are forced to restrict their streams in ways other noncommercial stations, like public radio, are not.

“Noncommercial religious broadcasters are now paying rates at a commercial level,” said Gray, who serves as counsel for the National Religious Broadcasters Noncommercial Music License Committee in the case. “They just want to pay a fair rate, the same rate that the secular NPR stations are paying.”

According to ADF, noncommercial religious broadcasters are now paying a rate 18 times higher than the average rate given to NPR stations. (Both public radio and college radio stations privately negotiated deals with SoundExchange.)

Some in the Christian music industry are cheering the changes in royalty agreements since they help artists make profit. The lower rates for noncommercial religious broadcasters have historically resulted in Christian artists receiving far less royalty revenue than their mainstream peers.