Small Webcasters Explain Why They Nixed SoundExchange Deal
September 19, 2007 at 2:47 PM (PT)
While SOUNDEXCHANGE should be happy that much of the industry media dutifully reported its ability to attract 24 small webcasters to its royalty discount proposal, the label interest group still has a way to go before convincing the lion's share of the Net radio community.
CNET NEWS reports that more than a few smaller webcasters remain unimpressed by the royalty collectors' proposal. DAVID OXENFORD, an attorney for a group of small Webcasters who refused the offer -- including ACCURADIO, RADIO PARADISE, RADIO, DIGITALLY IMPORTED RADIO and 3wk RADIO -- sent an e-mail that read, "If the only deal that SOUNDEXCHANGE offers to small webcasters is that which was just signed by the 24 ... they will do away with the independent webcaster who is serious about growing a business, but to whom a per-performance royalty creates real issues."
If the only deal that SoundExchange offers to small webcasters is that which was just signed by the 24 ... they will do away with the independent webcaster who is serious about growing a business
Since the offer is based on annual revenue levels, "you'll be left with an industry with essentially hobbyists and big companies that subsidize their webcasting with other lines of business -- essentially crushing the hopes of those who saw the Internet as a way to build an independent radio business," OXENFORD warned.
Another fly in SOUNDEXCHANGE's ointment is the fact that it only covers music from the major labels.Webcasters must still pay full CRB rates for use of music owned by nonaffiliated labels and artists.
Even though SOUNDEXCHANGE didn't cite any of the 24 webcasters by name, the RADIO & INTERNET NEWSLETTER did find someone who did take the deal: MICHAEL CLARK of CHRISTMASMUSIC247, a LIVE365 webcaster. He explained why he took the offer on a SOMAFM blog: "I play CHRISTMAS music all year round," he wrote. "My estimated [royalty] bill from JANUARY 1, 2006 through MARCH 2007 was $11,000. I estimated running up an additional $9,000 if I stayed webcasting through this CHRISTMAS season.
"In 2006 I had $1,200 in revenue; and estimated my revenue for 2007 was $3,000 ... I am an individual doing my station as a hobby/very small business... The reason I signed was to save myself more than $5,000.
"And yes, I'm now consigned to playing only SX-member music, or getting licenses from each independent artist I play. And that's quite difficult."
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