Online Radio Station Royalty Hike Battle Continues With Last Minute Reprieve Adding Drama

SoundExchange has informed pint-sized webcasters that they can continue to broadcast without fear of legal action as long as they stay current with the existing licensing fees while a revised deal is negotiated. The last-minute compromise between internet radio and the US Copyright Royalty Board (CRB) has given small and large webcasters a last minute reprieve from the new royalty rates, which were due to come into effect July 15.

The new rates threatened the continued existence of webcasters, in particular those serving multiple channels or stations, with royalties and fees, backdated to January 2006, that in many cases exceeded annual revenue. The rates set by the Copyright Royalty Board impose a $500 minimum fee “per station or channel,” plus a rate of 0.08 cents per song per listener for 2006 and 0.11 cents for 2007 (increasing yearly to 0.19 cents in 2011).

SoundExchange, the collection agency working on behalf of record labels and artists, made a commitment to webcasters before the House Commerce committee late last week that there would be no legal action taken as long as negotiations continued. But that commitment came with a price: SoundExchange agreed to a proposal from DiMA, representing online radio broadcasters, to cap the per station fee at a maximum of 100 channels, i.e. $50,000, as long as webcasters “agree to provide more detailed reporting of the music that they play and work to stop users from engaging in “streamripping” — turning Internet radio performances into a digital music library,” according to a statement released July 13. How exactly they are going to stop “virtual recording” is anyone’s guess… According to SoundExchange, only three of the top 20 webcasters are in perfect compliance with their reporting commitments and only 11 have even tried.

Meanwhile, the Chairwoman of the Committee on Small Business, Nydia M. Velazquez, and ranking member Steve Chabot introduced H.R. 3015, bipartisan legislation aimed at postponing the implementation of the CRB’s new fees for 60 days. The bill, which is expected to pass through Congress quickly, would not impact the pending Internet Radio Equality Act, introduced April 23 by U.S. Reps. Jay Inslee (D-WA) and Donald Manzullo (R-IL), which proposes a percentage-based royalty system similar to that paid by satellite and cable radio broadcasters.

Author: FutureMusic

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