SoundExchange Offers Reduced Rate To Small Webcasters
August 21, 2007 at 3:19 PM (PT)
Music industry Internet proxy SOUNDEXCHANGE has begun sending formal performance royalty offers to "qualified small webcasters" that are essentially the same rates as had been in effect since 1998. While current rate negotiations between SOUNDEXCHANGE and Net broadcasters of all stripes are ongoing, this new offer purportedly will keep small webcasters afloat until a new rate is jointly agreed upon.
"By providing each small webcaster with an agreement that extends the terms of the  Small Webcaster Settlement Act, it takes the uncertainty out of the air as to most of their programming, and lets them continue streaming," said JOHN SIMSON, Executive Director of SOUNDEXCHANGE.
By providing each small webcaster with an agreement that extends the terms of the  Small Webcaster Settlement Act, it takes the uncertainty out of the air as to most of their programming, and lets them continue streaming
Qualified small commercial webcasters (defined as those earning $1.25 million or less in total revenues) who sign the agreement will be able to stream sound recordings of any and all SoundExchange members at "subsidized rates," royalty fees of 10 or 12% of revenue. "The proposal also includes a usage cap to ensure that this subsidy is used only by webcasters of a certain size who are forming or strengthening their businesses," the press release details.
Small webcasters have until SEPTEMBER 14th, 2007 to accept the offer. Those who don't sign the agreement, but continue streaming, will be responsible for paying the new rates first announced by the Copyright Royalty Judges (CRJs) in MARCH, the first payment of which was due JULY 15th, 2007.
SOUNDEXCHANGE makes this new offer in the wake of calls by Congressmen HOWARD BERMAN (D-CA) and HOWARD COBLE (R-NC) to come up with a rate that won't be prohibitive to small webcasters and force them out of business."In the wake of our earlier announcement regarding ongoing negotiations, too many small webcasters were living with uncertainty about their status. Since most of them are not involved in the negotiations, we wanted to make sure that all small commercial webcasters could receive the benefit of our offer. It seems only fair," said SOUNDEXCHANGE General Counsel MICHAEL HUPPE.
Do the Net broadcasters -- and supporters such as the NAB and those who publish the RADIO & INTERNET NEWSLETTER -- think the new offer is fair? No one has commented -- yet.
Meanwhile, the haggling over a new royalty rate for Net broadcasters, big and small, goes on, with politicos sympathetic to the broadcasting parties threatening new legislation if a viable agreement isn't reached by the time CONGRESS is back in session after LABOR DAY. SOUNDEXCHANGE seems to be quite cognizant of the time issue. "We continue to negotiate with the relevant parties, and are hopeful that we can reach a solution that works for all small commercial webcasters. Of course, such a solution would need to be submitted and approved by the judges in order to apply industry-wide," HUPPE noted.
Yet SIMSON added: "Even while substantial progress has been made on all of the issues of concern with respect to the CRJs’ decision on webcasting, we cannot forget that CONGRESS granted webcasters and others unfettered access to music -- they can play it whenever they want without permission -- and all they have to do in return is pay a fair royalty."
The ball now seems to be in the Net broadcasters' court. Will they stay together to hammer out one comprehensive deal for all ... or will the small webcasters take this rate and let the big Net broadcasters (including all terrestrial radio interests) fight for their interests by themselves?