Well, as much as I enjoy the radio stations, you ARE using material that doesn't belong to you, so yes, I do think you should have to pay royalties. The music is copyrighted so in having a Disney radio station you are using their music without their permission. It's the same thing as regular radio stations. I'm surprised they've been left alone for so long.
First, it should be noted that the Royalties do not go to Disney. All royalties paid go to the composers, the composers estate if they have passed away, and to the artist (only on rare occasions where the contract lists the artist as royalty barring).
Also, radio stations pay the music unions (ASCAP or BMI) a yearly flat fee. This fee is usually much lower for this type of outlet because it is considered atmosphere ? music in the background. This allows them to play anything they want as long as they maintain a record of what was played on what day and how many times. Royalties are not paid on a title by title basis.
This is the reason why I could not include any of the area music from DCA on the DCA OA. Theme parks (area music) are under the same mandate that Radio Stations. A flat fee is paid to the unions. When I approached the idea of using the area music, I found that I would have to get clearance from the artist and/or record lable that holds the rights to these recordings and then pay additional royalties to use them on the album. The main difference between a Radio Station / Theme Park use and my use is that I was creating a product that people would buy and own. We would be getting money for our album so the composers and publishers want their cut - and rightfully so. With Radio, the audio just spills into people homes and no profit comes in from the broadcast of the music. Advertising is the lifeblood of radio.
However, though I can't say for sure, if you subscribe to a pay service for your audio source (like with XM Radio) you may see a slight increase in your subscription fee, but it would more than likely be so minimal that you may not even realize an increase.
Royalty increases are nothing for you to worry about, it only affects those who sell the music.
Should I be required to begin paying royalties to keep my station broadcasting I'll probably pull the plug. The majority of broadcasters at Live365 are hobbyists and make no money for their work. We actually pay for storage space on Live365's servers. Live365 sells the ads you hear during broadcast and the revenue is theirs. Broadcasters provide programming that is generally something they would like to hear on the radio but can't find on traditional terrestrial or Internet stations.
As Jessica has pointed out we don't own the copyrights for the Disney music being broadcast which means we don't have the right to make money from that music. None of us do. It's as if we have invited 15 or 20 of our friends over to listen to our Disney music collection. Disney, or any large media company, wouldn't expect me to pay them to do that. Royalties will come out of Live365's pocket and that cost will be passed on to advertisers, listeners and then broadcasters. If I'm expected to pay fees for the right to broadcast copyrighted works I'm going to expect to share in potential profit.
There are some good discussions on this subject going on in Live365's community section. Most of us agree the copyright holders are entitled to be paid for their work. The royalty rate and when they take effect seems to be where the battle lines are being drawn.
From what I've heard, terrestrial stations like KROQ do not have to pay for their webcast broadcasts. Live365 already pays royalties and has since it opened. Webcasters have to pay royalties, while commercial stations are exempt.