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SoundExchange misses deadline for webcaster royalty deal

18 February 2009 9:57 by Rich "vurbal" Fiscus | 3 comments

Yesterday SoundExchange and the National Association of Broadcasters (NAB) announced a deal for webcasting royalties. This deal covers only terrestrial radio stations, and not internet-only operations like Pandora. The deadline for SoundExchange to reach a deal with all webcasters (February 15) had already expired, which may mean more action from Congress in the coming weeks.

Or it may mean the courts will have the final word on internet radio royalties. Next month webcasters are scheduled to argue their case in front of a federal judge, appealing a March, 2007 decision by the Copyright Royalty Board (CRB) which created the current situation.

The board was charged with finding a compromise between record label and webcaster royalty proposals. Instead they stunned everyone by signing off on the one sided proposal from SoundExchange, representing the labels.

It's understandable that SoundExchange would be reluctant to give up too much in negotiations. After all the CRB has already given them a clear upper hand by refusing to hear an appeal of their original decision. At the same time, it would seem to be in the best interests of everyone to come up with reasonable rates that won't put the majority of webcasters out of business. The royalties effectively become nothing if there is no internet radio.

So far, aside from the terrestrial broadcasters represented by the NAB, only the Corporation for Public Broadcasting has been able to reach a royalty deal. Last week SoundExchange proposed a deal for very small internet radio operators, but that appeared to be intended more for appearance than actual progress.

Rather than holding the labels' feet to the fire to ensure a fair compromise, some members of Congress are supporting their efforts to get additional royalties for terrestrial broadcasts. The Performance Rights Act would provide the labels with a new royalty stream from traditional broadcasters.

Whether such an arrangement is fair or not, it seems to send a clear message that many Congressman prefer to just give the labels whatever they want - even if they fail to live up to existing obligations.

Permalink to this article | Topic: Lawsuits & Legislation

Pandora's future looking up following royalties agreement (15 July 2009)

Clear Channel revenue plummets in first quarter (19 May 2009)

House committee votes 21-9 in favor of new radio royalties (14 May 2009)

Activision sued over underpaid royalties (1 May 2009)

Man, dead since 1559, receives TV bill (14 March 2009)

SoundExchange seems desparate for an internet radio royalty deal (11 February 2009)

19 US Representatives find time to fight for radio royalties (5 February 2009)

Internet Radio saved? (29 September 2008)

Internet radio providers criticize SoundExchange's excessive administrative fees (9 June 2007)

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

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grkblood (Senior Member) 18 February 2009 11:02
*Quote:* Whether such an arrangement is fair or not, it seems to send a clear message that many Congressman prefer to just give the labels whatever they want - even if they fail to live up to existing obligations. Can we please get a story every now and then with a happy ending. Reading aD articles always gets me PO'ed at the world. [ + quote]
SProdigy (Member) 18 February 2009 11:38
Well, Liberty Media saved the day for Sirius XM... somewhat positive news related to this "radio" article. [ + quote]
beanos66 (Junior Member) 18 February 2009 13:09
the stars spend their money on cristal, stretch pimped hummers and cocaine the execs buy politicians and cocaine [ + quote]