SoundExchange Offers Small Webcasters Discounted Rate
August 21, 2007

There is some relief for small webcasters in the battle over Internet royalty rates, as SoundExchange today began sending formal offers to small webcasters that would allow them to continue operating through 2010 under essentially the same terms they have enjoyed under the Small Webcaster Settlement Act (SWSA). This offer means that qualified small commercial webcasters would be guaranteed the same rates through 2010 that they have received since 1998 for the use of recordings owned by SoundExchange members. Webcasters who sign the agreement will be able to stream these recordings at subsidized rates, though any recordings of non-members will still be subject to the new rates.

By providing each small webcaster with an agreement that extends the terms of the Small Webcaster Settlement Act, it takes the uncertainty out of the air as to most of their programming, and lets them continue streaming,” said John Simson, Executive Director of SoundExchange.

As part of the agreement, small webcasters (defined as those earning $1.25 million or less in total revenues) would pay royalty fees of 10 or 12 percent of revenue. The proposal also includes a usage cap to ensure that this subsidy is used only by webcasters of a certain size who are forming or strengthening their businesses. The webcasters have until September 14 to accept the agreement, and those who do not sign it will be responsible for paying the new rates that were first announced by the Copyright Royalty Board in March.

In announcing the discount, SoundExchange noted that while it is extending this offer on behalf of its members, it ultimately hopes for an industry-wide resolution to be implemented by the Copyright Royalty Judges. “We continue to negotiate with the relevant parties, and are hopeful that we can reach a solution that works for all small commercial webcasters," said Michael Huppe, General Counsel of SoundExchange. "Of course, such a solution would need to be submitted and approved by the judges in order to apply industry-wide."

Simson added, “Even while substantial progress has been made on all of the issues of concern with respect to the CRJs’ decision on webcasting, we cannot forget that Congress granted webcasters and others unfettered access to music – they can play it whenever they want without permission – and all they have to do in return is pay a fair royalty." 

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Manny Simon
VP/Adult Formats,
Republic Records

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