Music Sites And SoundExchange Royalty Deal Fails
February 18, 2009 at 5:03 AM (PT)
Negotiations between the DIGITAL MEDIA ASSOCIATION and SOUNDEXCHANGE over royalty fees for streaming music fell apart at the last minute, leaving the two without a deal at the FEBRUARY 15th deadline set by the Webcaster Settlement Act, reports PAIDCONTENT.ORG. DiMA members include REALNETWORKS, PANDORA and MTV.
The report says the expected deal ran aground during a conference call just before the deadline. No details on what the squabble was about but, in a statement, DiMA Executive Dir. JONATHAN POTTER said they couldn’t overcome a major difference, "We are unable to resolve our principled differences regarding the applicability of sound recording performance royalties to various activities of multifaceted online companies, particularly when those activities and their revenue are not directly associated with the performance of sound recordings."
In other words, REAL wants to pay royalties based on streaming music only, not on game or software revenue. REAL has said it may have to cut back on streaming music as a result. PANDORA has said it might have to shut down if forced to pay the full royalty increase.
What happens now? The 2007 decision by the COPYRIGHT ROYALTY BOARD that set the higher rates is set for appeal in MARCH.