July 13th, 2007
Net radio saved from the axe - maybe
Taking the conflict all the way to the 11th hours and then some, SoundExchange, the broadcasting royalty collection arm of the recording industry, and Internet radio stations have agreed to a certain, limited repreive from what may stations considered a Draconian new rate structure, Wired reports.
Under the new proposal, which must be implemented by the Copyright Royalty Board, SoundExchange would cap the $500 monthly per-channel minimum fee at $50,000 per year for webcasters. In exchange, webcasters would be required to provide more detailed data on the music that they play and make an effort to stop unauthorized copying from streamrippers — software that can turn ephemeral net radio streams into permanent recordings.
In the meantime, negotiations will continue to provide greater relief for small and nonprofit webcasters.
“We believe that this minimum fee proposal addresses webcasters’ concerns about the minimum fee affecting webcasters with hundreds or even thousands of stations,” said SoundExchange Executive Director John Simson.
The scheme must be approved by the CRB and SoundExchange has not promised not to enforce the rates that were scheduled to go into effect on Sunday. If this agreement is approved by CRB, it would supercede the currently approved rates. If not, SoundExchange will enforce the “killer” rates.
Royalties - backdated to January 2006 - at the new rates are due on Monday. Stations that don’t pay will not be immediately hounded, SoundExchange said, but they will start calculating interest, fess and penalties for late payments. And there will be no slack-cutting for the like of Yahoo and AOL. The big guys will be expected to cut checks on Monday.
Under one likely scenario, small sites might be permitted to webcast under their old, percentage-based rates until 2010. Large webcasters will be spared the minimum fee-per-channel rates, but according to SoundExchange, the flat per-song per-listener fee for large webcasters is not subject to negotiation.
The last minute deal came after the U.S. Court of Appeals for the District of Columbia Circuit refused to overturn the CRB’s decision to implement higher rates, per-song-per-listener fees and per-channel royalties.
“We are disappointed that the court failed to acknowledge the irreparable and, quite frankly, devastating effect these new royalties will have on the internet radio industry,” said Jake Ward, a representative of the SaveNetRadio coalition of webcasters, net radio listeners and artists, in a statement.
