Webcasting Royalty “Deals”

http://blog.wfmu.org/freeform/2007/09/radio-news-you-.html

A few major agreements concerning webcasting royalties were inked over the past few weeks, locking large and small commercial webcasters into (sort of) new SoundExchange-sanctioned rate schemes.

Large commercial webcasters convinced SoundExchange to cap the maximum amount they could collect from per-channel fees. Companies like Pandora and Live365 would have been financially devastated if forced to pay $500 apiece for each of their thousands of separate webstreams. Now, instead of owing millions of dollars in baseline fees, larger webcasters will pay a maximum of $50,000. The situation is far from rosy, however. Large webcasters still do not get a break on the newly increased per-song-per-listener royalties, which must be paid on top of per-channel fees. These webcasters have also agreed to comply with SoundExchange’s demanding reporting requirements, and will present the collection agency with 24-7-365 song information for each stream they host. Although SoundExchange has pressed the importance of these reporting requirements, they have not provided a realistic and easy method for webcasters to do so.

Small commercial webcasters were also dealt very limited relief from the new webcasting rates that went into effect on July 15. Webcasters who meet certain revenue limits (less than $1.25 million annually) will be allowed to pay royalties based on a percentage of revenue instead of exorbitant per-song-per-listener rates. This “deal,” however, is only good for music that is owned by SoundExchange members. Small webcasters still must pay the higher per-song-per-listener fees for playing music by non-SoundExchange members, and the whole deal is null and void if their listenership exceeds certain limits set by SoundExchange. Doesn’t sound like much of a compromise to me, but unfortunately, this may be all that small commercial webcasters are offered. Because SoundExchange has been so public about their “offers” and “good faith negotiations,” Congress has all but abandoned the Internet Radio Equality Act .

No news on the continuing negotiations for non-commercial webcasting rates: as it stands, non-commercial webcasters like WFMU can pay a lower royalty fee, but must keep listening numbers below a SoundExchange-determined threshold. We hope that the negotiating parties agree to eliminate these listening limits for all non-commercial educational webcasters.