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Internet radio stations snub SoundExchange offer

23 May 2007 19:21 by James "Dela" Delahunty | 9 comments

We reported yesterday that SoundExchange, the group backed by the record industry to collects Internet music royalties from Webcasters and satellite radio, offered to defer new copyright-payment rates for small Webcasters who claim the new payments would bankrupt them. The US Copyright Royalties Board (CRB) will implement higher charges for online radio music licenses from 15th July. Many companies say it will put them out of business.

SoundExchange offered smaller webcasters a deal that would allow them to keep paying the current royalties, but larger stations would have to pay the new amounts. SaveNetRadio, a group representing Internet radio stations, rejected the plan and said it is designed to stifle the growth of Internet radio services.

"The proposal made by SoundExchange would throw 'large webcasters' under the bus and end any 'small' webcaster's hopes of one day becoming big," SaveNetRadio spokesperson Jake Ward said. "Under Government-set revenue caps, webcasters will invest less, innovate less and promote less. Under this proposal, internet radio would become a lousy long-term business, unable to compete effectively against big broadcast and big satellite radio � artists, webcasters, and listeners be damned."

The deal would see stations paying 10% of their revenue in royalties up to $250,000, with an increase to 12% of revenue beyond that. What is considered the upper revenue cap on 'small' stations is not clear. Beyond the cap though, stations would move to a per-song payment of 0.08 cents per song per listener for 2006 and 0.11 cents for 2007, rising to 0.19 cents by 2010.

"A standard that would set a royalty rate more than 300% of a webcaster's revenue was not what Congress had in mind, and it must be adjusted if the industry is going to survive," said a SaveNetRadio statement. Satellite radio services currently pay just 7.5% of their revenue in royalties. Traditional radio is considered to be promotional airtime and so is free of the fees.

Source:
The Register

Permalink to this article

Pandora founder says royalty deal on the way (16 October 2008)

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

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

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

SoundExchange reaches deal with large webcasters (25 August 2007)

Internet radio providers criticize SoundExchange's excessive administrative fees (9 June 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!
borhan9 (AfterDawn Addict) 24 May 2007 6:03
What i don't get is why would they pay for. [ + quote]
ZippyDSM (AfterDawn Addict) 24 May 2007 17:40
Originally posted by borhan9: What i don't get is why would they pay for. because the media mafia says they need to pay it :X [ + quote]
borhan9 (AfterDawn Addict) 24 May 2007 18:17
Quote: because the media mafia says they need to pay it :X Everyone wants a piece of the action :) [ + quote]
rockjckey (Newbie) 24 May 2007 21:35
So why isn't broadcasting new songs over the internet considered "promotional" and free of all fees? [ + quote]
ZippyDSM (AfterDawn Addict) 24 May 2007 23:13
Originally posted by rockjckey: So why isn't broadcasting new songs over the internet considered "promotional" and free of all fees? because like radio stations that cant run new songs or old songs because they are not "slotted" for it,the music industry has very odd rules if they can not make moeny off the "promotion" then they refuse to promote it,least this is what they do in the most simplest form. [ + quote]
rockjckey (Newbie) 27 May 2007 11:45
So you're telling me that the record companies engage in a sort of "payola" by providing free promotional music to selected radio stations who they consider beneficial to sales and everyone else has to pay pay pay. Sounds illegal to me. [ + quote]
ZippyDSM (AfterDawn Addict) 27 May 2007 15:42
it aint the media mafia for nothing! [ + quote]
gooses (Junior Member) 29 May 2007 4:56
As with everything else, the RIAA and the "media mafia" want their share of everything and will stop at nothing to get theirs. At this rate, they will destroy everyting we hold dear in online music. Per usual, they are as nice and gentle as an elephant in a china shop. [ + quote]
Unfocused (Member) 16 June 2007 19:45
It is this kind of crap that encourages piracy. [ + quote]