SoundExchange Backtracks on Capping Minimum Fee

July 18, 2007 – In contrast to its cooperative spirit during last week’s House Commerce Committee Roundtable regarding Internet radio royalties, on Monday night SoundExchange informed DiMA that it will not agree to reduce the $1 billion minimum “administrative” royalty unless Internet radio services agree to unrelated technology mandates that have previously been rejected several times. 

Jonathan Potter, Executive Director of the Digital Media Association, offered this statement:
“This is a disappointing turn after what we thought had been a very productive roundtable.

“The uncapped $500-per-channel minimum fee generates more than $1 billion annually for what the CRB determined are supposed to cover SoundExchange’s administrative costs.  This is far more money than needed to administer a mere $20 million in Internet radio royalties.  DiMA would like to get the per-channel minimum off the table and SoundExchange has said publicly that it does not expect to collect this money.

“DiMA and our members are happy to cooperate on issues of common interest even if outside the scope of the CRB decision, but SoundExchange has demanded enforceable technology mandates that are unreasonable, unworkable and way off-topic. They seek to leverage this absurd fee to impose mandates that they have unsuccessfully sought elsewhere. 

“DiMA companies are prepared to set a time to meet with the SoundExchange Board to negotiate the royalty rates for the 2006-2010 CRB term.  At that time, we can also discuss the establishment of working groups that would address other technical industry concerns.  In the meantime, we would like to get the per-channel minimum off the table and move on to royalty rate negotiations.”

Included are copies of SoundExchange’s letter to DiMA and DiMA’s reponse: Letter 0716071.pdf to SoundExchange 7 17 07rev.pdf

2 Responses to “SoundExchange Backtracks on Capping Minimum Fee”

  1. Sound Exchange…Wake up!!!

  2. Keep yelling — they have to hear sooner or later — or at least you’d think so…

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