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SoundExchange reaches deal with large webcasters

25 August 2007 6:50 by Rich "vurbal" Fiscus | 5 comments

The Digital Media Association (DiMA) and SoundExchange announced an agreement yesterday to cap the $500 per-channel webcasting fees at $50,000�a victory for large webcasters that stream thousands of stations.

SoundExchange is an organization that collects royalties for many companies, including both RIAA members and independent labels.

Large webcasters technically have individual channels for each user, making their royalty responsibility under the recently passed Copyright Royalty Board (CRB) webcasting rates, would be more than the revenue generated by their service. The new rates set a $500 minimum payment per unique channel.

The rates are based on an entertainment industry proposal, which the CRB essentially passed as submitted. Not surprisingly they demonstrate a clear disregard for how online radio's business model works. It's really just another example of the industry reaching out for any source of revenue they can as CD sales fall.

They already have a royalty model established with satellite radio services that exceeds what they get from terrestrial broadcasts. The webcaster rates go even further, and the music industry would like to extend them to terrestrial broadcasts.

The new deal with SoundExchange will limit the minimum fees to only apply to the first 100 channels from a given webcaster.

SoundExchange has an incentive to get a deal done soon. Congress is returning from its August recess soon, and several members of Congress have threatened to push forward on the Internet Radio Equality Act if nothing has been worked out.

Source: Ars Technica

Permalink to this article

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 offers $2,500 limit on multi-stream stations (8 July 2007)

Internet radio providers criticize SoundExchange's excessive administrative fees (9 June 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)

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Discuss this article!
Unfocused (Junior Member) 25 August 2007 7:20
Why should they worry about stream ripping? These are generally of lower quality than a comperable download. [ + quote]
ShoeBark (Newbie) 25 August 2007 13:20
It's twice as much work streamripping as it is to download the song. [ + quote]
DXR88 (Member) 25 August 2007 14:33
Great for the already rich companys. So What of the Smaller less money oriented companey. they all get left in the dark, thats what happens. Automation of tracking doesn't mean accuracy of that tracking. And DRM ing a stream is retarded. [ + quote]
Unfocused (Junior Member) 25 August 2007 19:46
Isn't a stream rip done in real time? If this is the case, downloading is much faster. [ + quote]
borhan9 (AfterDawn Addict) 1 September 2007 13:12
Thats a very large cap. [ + quote]