Update: Webcasters Gain Partial Reprieve From Royalties
July 13, 2007 at 5:50 PM (PT)
Late FRIDAY (7/13), SAVENETRADIO.org posted this announcement on its website:
"Congress and SOUNDEXCHANGE have heard loud and clear the amazing outpouring of support for Internet radio from webcasters, listeners and the thousands of artists they support. A commitment has been made to negotiate reasonable royalties, recognizing the industry’s long-term value and its still-developing revenue potential.
"During negotiations SOUNDEXCHANGE committed temporarily not to enforce the new royalty rates so webcasters can stay online as new rates are agreed upon.
During negotiations SoundExchange committed temporarily not to enforce the new royalty rates so webcasters can stay online as new rates are agreed upon.
"This development is due in great part to the millions of people who have let their congressional representatives know about their support of Internet radio. Over 125 representatives have cosponsored the bill to this point.
"We urge listeners to continue calling their senators and representative to ask them to co-sponsor the Internet Radio Equality Act."
Report: Webcasters Can Survive Deadline
Earlier today ALL ACCESS reported that, according to a commitment made yesterday by SOUNDEXCHANGE Executive Director JOHN SIMSON in front of the House Commerce committee, small and noncommercial webcasters would continue to be able to stream next week -- after the CRB's effective date of JULY 15 -- without fear of the threat of legal action against them and may continue doing so as long as good-faith negotiations between the parties are continuing, reported KURT HANSON in the RADIO AND INTERNET NEWSLETTER (RAIN).
In an interview with RAIN last night, SIMSON explained, "For the people who want to comply with the law and are in bona fide negotiations with us, we don't want those people to be intimidated. And we don't want them to stop streaming." SIMSON qualified his statement by noting, "That's just so long as they're continuing to pay under the license they had."
SIMSON, representing SOUNDEXCHANGE, made this commitment at a House Commerce committee "roundtable" yesterday, which was an invitation-only event with approximately a dozen Congressmen, various staffers, and a number of representatives of both sides of the royalty dispute invited to attend and speak.
There was also apparently progress made at the roundtable on the $500-per-channel "minimum fee" that has threatened to bankrupt massive multichannel webcasters like PANDORA, RHAPSODY and LIVE365.
"We also did make an offer today on the cap," SIMSON revealed. "At the meeting, SOUNDEXCHANGE offered to accept DIMA's [DIGITAL MEDIA ASSOCIATION's] suggestion of a cap on the 'minimum fees' of $50,000 per service -- that's $500 per channel up to a maximum of 100 channels." SIMSON said there were two conditions attached to this solution: "First, that they become much more compliant in their reporting obligations -- only three of the top 20 webcasters are in perfect compliance, and only 11 have even tried -- and we need to move to census as soon as we can. And we asked for their help with stream ripping, to work on a technologically feasible solution." SIMSON said he thought DIMA found both conditions acceptable.
Read the full report at www.kurthanson.com.
SoundExchange Confirms Minimum Fee Offer
Later, in a press statement, SOUNDEXCHANGE confirmed it has offered to cap the $500 per channel minimum fee at $50,000 per year for webcasters who agree to provide more detailed reporting of the music that they play and work to stop users from engaging in “stream ripping" -- turning Internet radio performances into a digital music library.
SIMSON said, "We believe that this minimum fee proposal addresses webcasters' concerns about the minimum fee affecting webcasters with hundreds or even thousands of stations. We do expect commercial webcasters like YAHOO! and AOL to pay the new royalty rates set by the CRB due JULY 15. It is essential that recording artists and content owners receive full and fair compensation from the webcasters making use of their creative works.
"We continue to work with small and noncommercial webcasters and hope that we will be able to resolve our issues as soon as possible."
Indeed, NATIONAL PUBLIC RADIO and the CORPORATION FOR PUBLIC BROADCASTING had a productive meeting today with SOUNDEXCHANGE, NPR VP/Communications ANDI SPORKIN said, adding, "At the meeting, no agreement was reached on a substitute for the MARCH 2 decision of the COPYRIGHT ROYALTY BOARD. CPB offered a payment to SOUNDEXCHANGE, which has been accepted, to cover what NPR and CPB believe is due JULY 15 as the base rate payment for stations beginning MARCH 2, 2007. NPR and CPB are confident that public radio stations can continue their music streaming operations for the next three months as good faith discussions are ongoing about the structure and amount of the ultimate fee. At this time, public radio stations will continue music webcasting without a limit to visitors to their webstreams or changes in their current operations."
Lawmakers Propose Bill To Extend Webcasters' Deadline
Before the statement came late today from SOUNDEXCHANGE, Reps. NYDIA VELAZQUEZ (D-NY) and STEVE CHABOT (R-OH), who lead the House of Representatives Small Business Committee, proposed a bill that would stall the onset of new webcaster fees until 60 days after the JULY 15 deadline, CNET.com reported. VELAZQUEZ and CHABOT said the bill was not meant to offer a solution, but was meant to give more time for both sides to reach a compromise.