News & Reviews
Internet music reactions mixed to SoundExchange offer; kill date of
It looks like many websites that stream Electronic music will survive
the Draconian new royalty fees that the Copyright Royalty Board tried
to push through earlier this year. Internet Webcasters have until this
Friday (Sept. 14) to accept a new deal from SoundExchange, the group
responsible for collecting royalty fees and distributing them to
various music industry companies.
SoundExchange offer, webcasters that earn $1.25 million or less in
yearly gross revenue could pay royalty fees of 10 or 12 percent of
annual revenue. If the webcasters decline the new offer, they’ll have
to pay the royalty increases proposed by the Copyright Royalty Board
earlier this year, SoundExchange said in a press release.
The Copyright Royalty Board created the ruckus early this spring when
it proposed to sharply escalate royalty fees for webcasters. Depending
on the size of the website, those increases would have been as high as
300 to 1,200 percent.
However, two US
Senators, Ron Wyden (D-OR) and
Sam Brownback (R-KS), pushed to
vacate the decision, and the two groups -- CRB and
SoundExchange on the left, the senators and hundreds of Internet
broadcasters on the right -- appeared at a stalemate for months. Two
deadlines for the new rates passed (on May 15, then on July 15) without
Brownback and Wyden also pushed the Internet Radio Equality Act of 2007
(H.R. 2060) to correct the enormous disparity created by the CRB by
putting Internet radio on par with satellite radio. The measure
prompted a bevy of letter-writing campaigns and garnered the support of
legislators such as US Congresswoman Barbara
"I believe that innovation and emerging technologies will continue to
play a vital role in the 21st Century economy and that is why I am a
co-sponsor of H.R. 2060," Lee said in an e-mailed statement to
WORD’N’BASS.com. "I believe that this legislation will not stifle the
emerging diversity in media and access to new music that internet radio
represents and ensure that artists continue to benefit from a broader
market and fair payment rates."
The CRB initiative could have shut down hundreds of websites that
broadcast electronic music like House, Trance and Drum & Bass, most
of which are popular but generate revenues well below the $1.25 million
that SoundExchange considers a small webcaster. So far, reactions to
the new SoundExchange offer appear mixed.
Imported, which announced that it would shut down its public
(free) streams as soon as the CRB-backed rates went into effect,
appears to have backed off the issue. It pulled a news section
outlining the CRB dispute from the website shortly after the
SoundExchange offer went public, has continued playing a bevy of
Electronic music genres, and even added six new stations.
In contrast, San Francisco-based SomaFM
said that it will decline the offer, adding that SoundExchange should
follow the U.S. Small Business Administration's standard for a small
broadcasting company: $6 million or less in annual revenue.
SomaFM said in a press release that the royalty rate increase is still
too high and that while RIAA is negotiating on SoundExchange’s behalf
with several different groups, these negotiations are being kept secret
in a traditional divide-and-conquer plan of attack.
"The RIAA keeps saying that most webcasters are billion dollar
companies, but with the exception of AOL, Yahoo and Real, most of the
top-20 listened-to music webcasters are privately-held, small-scale
independent operations," said Rusty
Hodge, Founder and General Manager of SomaFM, in the statement.
"The RIAA is willing to let independent webcasters be the collateral
damage in their battle to extract more control over the large
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