Today’s CRB rate news from RAIN – Jul 5 2007

www.kurthanson.com


From KCRW’s “On the Beat”:
“The current issue facing Internet radio streaming has heated to unprecedented levels.

“On June 26, KCRW participated in a ‘Day of Silence’ for listeners to learn about and protest the outrageous royalty rates and fees facing all internet radio stations. The campaign, which ran on many streaming radio stations around the country, urged listeners to speak with their Congressional representatives. A flood of calls and letters poured into Congressional offices across the country, jamming servers and causing outages…

SX convinced CRB it needs
$500/channel just for administration
“[Under the ] Copyright Royalty Board [decision] … every streaming radio station is required to pay a minimum of $500 for each stream to SoundExchange. The monies paid would be used to fund the administration of SoundExchange, and anything left over, to be paid to the artists and labels.

“But the Board failed to recognize the unique nature of some of the most popular digital radio stations. Real, Yahoo, Live 365 and Pandora have thousands if not millions of custom streams. According to the Board’s decision, each of these individual streams should be charged the $500 minimum to Sound Exchange…

“Based on the new rate schedule, Live 365 would face $10 million in royalty fees. Yahoo, Real and Pandora collectively owe over a billion dollars in royalties. None of these organizations generate a fraction of [the] income [necessary] from streaming to possibly pay these fees.

“Sound Exchange must have realized that an outpouring of consumer protest to Congressmen could be damaging, because they took swift action. They issued a press release on June 29, announcing a voluntary cap on the fee structure. [see RAIN coverage here] They would cap their administrative fees for streaming radio stations to no more than $2,500 per organization. Of course, royalties would be additional.

For cap, SX demands webcasters abandon
current and future legislative efforts

“But what their press release didn’t mention, was the quid pro quo nature of their offer. SoundExchange would reduce their administrative fee, if those organizations agreed to abandon their legislative efforts to protest the royalty rates now and in the future. In addition, the fee reduction would only be good for 18 more months, thereby forcing those organizations to fight all over again in 2009 against the same problem.

“One would hope record labels and artists would work together with Internet radio to encourage health and stability in this growing sector.”

Read and/or listen to KCRW’s Celia Hirschman’s story here.

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