Digital Media Association Reacts To New Web Royalty Rates

Reasonably Happy

DIGITAL MEDIA ASSOCIATION Interim Executive Director LEE KNIFE has reacted to the determination last week by the COPYRIGHT ROYALTY BOARD on the rates and terms for Internet radio royalties covering the 2011-2015 period (NET NEWS 12/16).

KNIFE said, "DiMA and our member companies are pleased that the COPYRIGHT ROYALTY BOARD did not adopt the extremely high rates proposed by SOUNDEXCHANGE. Over the past 10 years, webcasters have experienced a near three-fold increase in the rate they pay SOUNDEXCHANGE for use of sound recordings. These dramatic increases have made it difficult for many webcasters to continue delivering the innovative services that millions of Internet radio fans have come to rely on.

"We remain dissatisfied with the process used for setting Internet radio royalty rates, which are by law based on marketplace deals. Under current rules, SOUNDEXCHANGE was able to unilaterally prevent the Board from considering numerous agreements -- negotiated by SOUNDEXCHANGE itself -- that contained rates that more fairly reflected the needs of both RIAA member companies and webcasters to operate in a reasonable business environment.

"We are hopeful that in 2011 Congress will address problems in the rate-setting structure, and ultimately develop a system that enables all music radio services -- internet, cable and satellite -- to operate and pay royalties according to the same standard, applied under a fair set of rules."

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