James Delahunty
22 May 2007 19:31
SoundExchange, the group backed by the record industry to collects Internet music royalties from Webcasters and satellite radio, said on Tuesday it would defer new copyright-payment rates for small Webcasters who claim the new payments would bankrupt them. The U.S. Copyright Royalty Board (CRB) introduced sharply higher royalty rates for these companies on May 1, 2007.
SoundExchange said its new offer applies to webcasters with revenues of $1.25 million or less, adding that it was addressing "alleged weaknesses in the small Webcasters' businesses." The move follows pressure from Congress, where legislators are attacking the royalty rate increase saying it threatens the fledgling industry.
"Although the rates revised by the CRB are fair and based on the value of music in the marketplace, there's a sense in the music community and in Congress that small Webcasters need more time to develop their businesses," said John Simson, executive director of SoundExchange. However, Jake Ward of the SaveNetRadio Coalition believes the offer falls short.
"A proposal like this would doom small Webcasters and kill large Webcasters," Ward said. He believes that deeming a webcaster large and therefore subject to higher rates ignores the fact that many of these "larger" sites are still small and struggling companies. "It would also force small companies to stay small," he said. "There's no question that Webcasters with government-set revenue caps would invest less, innovate less and promote less."
Source:
Reuters