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Information Technology News Some progress on webcast royalties
Information Technology News Some progress on webcast royalties | Some progress on webcast royalties |
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| by Stephen Withers | |
| Friday, 24 August 2007 | |
      
SoundExchange (the organisation designated by the US Copyright Office to collect statutory licence fees for digitally-transmitted music) and several major webcasters have reached an agreement that would limit the recently introduced $US500 minimum fee per channel or station to $US50,000 per service. This may make it possible for services operating a large number of channels each with relatively low listenership to stay in business. The fee is treated as an advance against royalties, so popular channels may end up paying more than $US500. At this stage the agreement is a side deal between the specific parties, the Copyright Royalty Board will be asked to adopt the terms. "This agreement shows that we can address specific issues of concern to the industry through private negotiations while upholding the integrity of the CRB process and while protecting the interests of SoundExchange members," said John Simson, executive director of SoundExchange. The deal is supported by the SaveNetRadio coalition. "This agreement is a clear sign of progress in the ongoing negotiations between webcasters and SoundExchange and a very good first step toward a viable solution, but it is just the beginning. As the negotiation of recording royalty rates and terms continues, SaveNetRadio urges everyone involved to work in good faith toward a resolution," said spokesperson Jake Ward. The fine print requires webcasters to report all tracks played, and the creation of a joint committee of SoundExchange and the Digital Media Association to investigate anti-streamripping measures. SoundExchange has also offered small commercial webcasters an agreement that extends the previous Small Webcaster Settlement Act royalty rates until 2010 instead of imposing the higher rates that recently came into force. The concession only applies to recordings owned by SoundExchange members, but that includes all the major labels. Small webcasters are defined as those earning $US1.25 million or less in total revenues. The deal would allow them to pay royalty fees of 10 or 12 percent of revenue subject to a usage cap. The new rates are framed in such a way that webcasters can be liable to pay royalties in excess of their revenues. "[I]f we extrapolate our current revenue to royalty ratio, our rates would go from $150,000 to $5 million at the point we hit the $1.25 million revenue cap," said Rusty Hodge, general manager of listener-supported SomaFM. "So if we can increase the size of our business to over 1.25 million dollars, we'll be forced out of business. This isn't an offer. This is a restraint of trade." SoundExchange's offer is open until September 14. |
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