SoundExchange eases webcast royalty load

Stephen Withers
Monday, 02 July 2007 04:30

Your IT - Home IT

Webcasters operating multiple channels may benefit from a concession made by the body that collects music performance royalties.

New arrangements due to go into effect in the middle of this month impose a $US500 minimum fee "per station or channel". SoundExchange has announced a voluntary cap of $US2500 per service, meaning that individuals or organisations running multiple channels each generating low levels of income are less likely to be put out of business.

"The idea that the per-channel minimum might have a disproportionate impact on certain Internet Radio stations was never presented to the Copyright Royalty Judges," said Michael Huppe, general counsel of SoundExchange. "Nonetheless, at the request of Congress, we are trying to work with the small subset of affected webcasters, and are offering this proposal in the hopes of addressing those concerns."

John Simson, executive director of SoundExchange added "We certainly don't want anybody to get unduly hurt by the minimum fee, but there is a value to music and a cost to administering the digital royalty program, and we wanted to ensure that everyone was treated fairly – artists, webcasters and record labels."

Jonathan Potter, executive director of the Digital Media Association said his organisation would agree to SoundExchange's proposal if the cap lasted the entire term of the CRB ruling (ie, to 2010), but not to the current termination date in 2008.

"Any offer that doesn't cover the full term is simply a stay of execution for Internet radio.  The looming 2009 billion-dollar threat is destabilizing and inhibits investment and growth'" he added. "DiMA, like thousands of artists and millions of consumers, wants a solution that promotes long-term industry growth. A billion-dollar 'minimum fee' is equally absurd in 2006, 2007, 2008, 2009 or 2010.  It should be eliminated – period.

Potter also chided SoundExchange for negotiating via press release.

Large webcasters such as Yahoo and Live365 are likely to be the major beneficiaries of SoundExchange's concession.

SoundExchange officials said the organisation is negotiating with non-commercial and small commercial webcasters regarding "below market rates" unders terms similar to those previously provided by the now-lapsed Small Webcaster Settlement Act.