James Delahunty
23 May 2007 19:21
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