RealTime IT News

Webcasters, SoundExchange Continue Negotiations

With a Saturday midnight deadline looming for controversial new Internet royalty rates to take effect, webcasters and the music industry continued to negotiate Friday afternoon to reduce the fee hike webcasters claim will be ruinous.

Having already extended new offers to small and independent webcasters, SoundExchange, which negotiates and collects royalties on behalf of music labels and artists, now must deal with large webcasters.

Those webcasters have loudly complained about the March Copyright Royalty Board (CRB) decision that would charge Internet broadcasters not only increased streaming fees but also a $500 per channel fee. Webcasters like AOL, Yahoo  and Pandora have hundreds of channels.

Thursday evening, SoundExchange offered to cap the $500 per channel minimum fee at $50,000 per year for webcasters who agree to provide more detailed reporting of the music they play.

"We believe that this minimum fee proposal addresses webcasters' concerns about the minimum fee affecting webcasters with hundreds or even thousands of stations," SoundExchange Executive Director John Simson said in a statement.

The Digital Media Association (DiMA), which represents the large webcasters, was unavailable for comment on the proposal.

"We do expect commercial webcasters like Yahoo and AOL to pay the new royalty rates set by the CRB due July 15," Simson said. "It is essential that recording artists and content owners receive full and fair compensation from the webcasters making use of their creative works."

Simson also said that although small webcasters have not officially accepted SoundExchange's offer that would effectively keep their streaming fees at 2002 rates, "we continue to work with small and noncommercial webcasters and hope that we will be able to resolve our issues as soon as possible."

Also Thursday, U.S. Rep. Nydia Velasquez (D-N.Y.) introduced legislation to stay the rate hike for 60 days to give SoundExchange and webcasters more time to negotiate. Velasquez' spokesman Kate Gilman told internetnews.com that while the bill couldn't be passed this week, Velasquez hopes to get the measure before the House next week.

Earlier this week, the U.S. District Court of Appeals denied webcasters' appeal for an emergency stay of relief. The court decision does not preclude the court from ultimately ruling in favor of the webcasters. The May appeal, filed by DiMA, is still pending.