SoundExchange Reaches Agreement On Web Royalty Cap
August 23, 2007

After a Thursday meeting with DiMA, SoundExchange has announced it has reached an agreement with larger webcasters over the minimum fee cap for Web royalties. The Copyright Royalty Board (CRB) had required a $500 minimum fee "per station or channel," regardless of the total number of stations. Today's new agreement sets a cap of $50,000 per service on the $500 per station number. The two parties also agreed that beginning in six months, webcasters will provide SoundExchange with a full census of songs performed (24 hours a day, 365 days a year) in order to accurately distribute royalties to independent labels and artists. Furthermore, SoundExchange and DiMA will form a committee to evaluate the issue of "streamripping" (copying a song from a Web stream) and potential technological solutions to it.

Though the deal currently applies to those services involved in today's agreement, SoundExchange says the agreement will be presented to the Copyright Royalty Judges as an industry-wide rule.

John Simson, Executive Director of SoundExchange, said in a statement, "This agreement shows that we can address specific issues of concern to the industry through private negotiations while upholding the integrity of the CRB process and while protecting the interests of SoundExchange members."

He continued, "With the small webcaster agreement we sent out earlier this week, with progress on the non-commercial webcaster front, and with this agreement, SoundExchange has now addressed the key issues of concern with respect to the CRB rate-setting decision while still protecting the value of sound recordings. We now hope to move forward together with our partners, the webcasters, in providing an enhanced listening experience through Internet radio."

DiMA Executive Director Jonathan Potter released a statement saying, "This agreement marks an important first step in the Internet radio royalty negotiation process. We’re encouraged by this development and the knowledge that good-faith negotiations have begun. We look forward to the next step of negotiating the royalty rates that will allow for the growth of the Internet radio industry, a platform for music discovery for consumers."

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Manny Simon
VP/Adult Formats,
Republic Records

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