Webcasters Tell SoundExchange Its Deal Stinks

http://blog.wired.com/music/2007/09/webcasters-tell.html

By Eliot Van Buskirk EmailSeptember 19, 2007 | 4:41:23 PMCategories: Save Net Radio  

Snr Twelve webcasters and SaveNetRadio have responded to SoundExchange’s problematic offer to charge qualifying small webcasters a percentage of revenue rather than the per-song rates mandated by the Copyright Royalty Board, claiming that SoundExchange’s deal is more of a strong-arm negotiating tactic than a good-faith offer to resolve the disputes over webcaster royalty rates.

Here’s their statement, in which the undersigned webcasters remind SoundExchange and Congress that they are “willing to fight” for a “fair and lasting resolution” :

Webcasters Stand Firm
Deal With Us In Good Faith or No Deal!

Wednesday, September 19, 2007 SAN FRANCISCO, CA. – Thousands of
webcasters stand firm by rejecting the most recent Copyright Royalty
Rate proposal made by SoundExchange. The latest take it or leave it
“offer” made by SoundExchange on behalf of the recording industry has
done nothing to further negotiations with webcasters, and a mere 24
small webcasters have felt they had no choice but to give in to the
record labels demands.

“The latest proposal made by SoundExchange is extremely
disappointing, at a time where we need real progress, not hollow
tricks.” SaveNetRadio spokesperson Jake Ward said.  “While the clock
continues to tick for webcasters, SoundExchange continues to play
games with their good faith  The resounding rejection of this offer
should serve as a reminder to SoundExchange, and to Congress, that
the webcasting community is intent on a lasting and fair resolution
to this issue, and willing to fight for it”

We, the undersigned have made it very clear to the Sound Exchange
exactly why this latest offer is unrealistic and unacceptable.  Its
terms are not viable for webcasters seeking to run profitable
businesses.  One such term is the newly added ATH (Aggregate Tuning
Hour) cap which immediately makes many mid-level webcasters
ineligible for the recently presented agreement.  For stations with
revenues far below the $1.25 million cap, but with healthy listener
bases, this ATH cap forces payments at the CRB rates.

This deal is not feasible for anyone who wants to grow their
business.  It contains the aforementioned $1.25 million revenue cap,
which limits growth and puts in place a dangerously low hard ceiling
for revenue generation.   The Small Business Administration revenue
cap for over-the-air broadcasters to be considered a small business
is $6.5 million – this would seem a fair cap, with precedent.

Also, the offer only covers copyright holders that are SoundExchange
members, of which there are approximately 20,000.  Between us, the
undersigned webcasters played far more artists than that in the last
year.  Under the SoundExchange offer for artists not on that limited
roster, webcasters would have to pay at the bankruptcy-level rates,
which were set in the fatally flawed Copyright Royalty Board (CRB)
ruling in March.  Those CRB rates were condemned by webcasters, the
press, and members of Congress and deemed as wildly out of line and
detrimental to all parties concerned – including the RIAA.

We have asked for a reasonable, long term solution, not one that is
subject to increase at the whim of the record industry every five
years.  2010 is little more than 2 years away, and it would be
difficult for any business owner to accurately forecast profits and
build a successful business model with a huge expense variable
looming in the future.

Although several of the webcasters listed below are currently
involved in direct negotiations with Sound Exchange, the process
remains exceedingly slow and increasingly unpromising. In the
continuing absence of a genuine offer that would allow internet radio
to continue to be the vital medium for new music discovery we implore
our listeners and fans of internet radio to continue to urge your
legislative representatives to pass the Internet Radio Equality Act
(HR2060, S.1353).

For information on how you can contact your representative, please
visit http://www.savenetradio.org.

Signed:

Jeff Bachmeier, .977
Val Starr, GotRadio.com, 100hitz.com
Rusty Hodge, Somafm.com
Rick White, BigR Radio. 1faith.fm
Donnie Mowbray, 181.fm
Kurt Hanson, AccuRadio
Dave Landis, Ultimate 80’s
Bill Goldsmith, Radio Paradise
Ted Leibowitz, BagelRadio
Sal Amato, Dot1media
Brandon Casci, Loud City
Jim & Wanda Atkinson, 3WK
Ari Shopat, Digitally Imported
Mike Roe, Radio IO

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