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Internet radio providers criticize SoundExchange's excessive administrative fees

9 June 2007 6:08 by James "Dela" Delahunty | 4 comments

Internet radio providers such as RealNetworks and Yahoo have sent letters to politicians to raise awareness of a troubling provision in the Copyright Royalty Boards's (CRB) new fees for Internet radio broadcasters that demands a minimum of $500 per "channel" every year to cover the administrative costs of SoundExchange. In the letter, the Internet radio providers said this would force them to give SoundExchange billions of dollars in addition to significantly higher royalty rates.

RealNetworks, for example, offers over 400,000 channels through its Rhapsody music service and so could be forced to pay an annual fee of $200 million. The letter explains how SoundExchange does not necessarily plan to distribute these administrative fees to artists, and has provided no explanation of how the fees are used.

The letter also points out that the fee was capped at $2,500 per webcaster until 2005, but the new rules have no cap at all. When Ars Technica spoke to Internet radio provider Live365 a month ago, it discovered that Live365 handles all of its station administration and licensing itself and merely submits reports to SoundExchange "as a single service." So why does SoundExchange need $500 per channel for administration when licensing and administrative services are already largely handled by Internet radio providers?

Source:
Ars Technica

Permalink to this article

SoundExchange misses deadline for webcaster royalty deal (18 February 2009)

RIAA argues for basing songwriter royalties on revenue (4 March 2008)

Yahoo threatens to drop Internet radio because of royalties (29 November 2007)

Webcaster testifies about royalties on Capitol Hill (26 October 2007)

Webcasters to plead royalty case in Senate hearing today (24 October 2007)

SoundExchange reaches deal with large webcasters (25 August 2007)

Webcasters want appeals court to delay new royalty rates (2 June 2007)

Internet radio stations snub SoundExchange offer (23 May 2007)

SoundExchange offers smaller webcasters lower royalty rates (22 May 2007)

US Copyright Royalty Board rubber stamps recording industry proposed rates (5 March 2007)

Webcasters and recording industry agreed over royalty rates (12 February 2004)

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Discuss this article!
Kraut1 (Newbie) 9 June 2007 12:48
It's called the old fashioned GREED! [ + quote]
borhan9 (AfterDawn Addict) 9 June 2007 19:03
It's funny if the government of any country came out and said that we needed to increase Taxes because we need to make more money people would be in an uproar. Now the new idea is when they start to privatize anything and claim this is so that the govt will not be a part of the company they bring comities and organizations to collect money (taxes) which basically makes money for the govt but makes the consumers seem silly not to understand that :) [ + quote]
Steve83 (Member) 15 June 2007 13:31
They have to be paid for keeping track of all the money they're being paid, and for hauling it all to the bank. [ + quote]
Unfocused (Member) 30 July 2007 21:33
Greed has brought down so many companies. [ + quote]