Not actually "saved" but a reprieve -- David
Online Radio Is Saved; SoundExchange Will Not Enforce New Royalty Rates
on Sunday
By Eliot Van Buskirk
July 12, 2007 | 7:35:30
At today's Congressional hearing about the new rates for online radio
that would essentially destroy it (as readers of this blog already
know), SoundExchange, which was scheduled to receive the new royalty
payments on Monday morning (since the enforcement date falls on a
Sunday), made a startling statement.
The SoundExchange executive [Jon Simson, executive director] promised --
in front of Congress -- that SoundExchange will not enforce the new
royalty rates. Webcasters will stay online, as new rates are hammered out.
I just spoke with Pandora founder Tim Westergren, who expressed relief
that Pandora wouldn't have to shut down on Sunday in response to the new
rates. He said, "It was getting pretty close. I always had underlying
optimism that sanity was going to prevail, but I was beginning to wonder."
He said everyone who called their Congress person about this should feel
that they had an effect on the process: "This is a direct result of
lobbying pressure, so if anyone thinks their call didn't matter, it
did. That's why this is happening." The flyer DiMA distributed to
Congress today probably helped a bit too, but overall, it appears
Congress intervened due to pressure from web radio listeners.
Funnily enough, Westergren told me this mere hours after a
representative of SoundExchange said
that the new rates are "etched in stone." Evidently not.
-----
Update: Another source -- close to the situation although not inside
today's closed-door hearing -- confirmed the following: Pandora was
there; "progress was made"; the minimum fees are indeed off the table;
and SoundExchange and the webcasters that were part of the Copyright
Royalty Board hearings are going to have another chat about the rates.
However, the source said the big question right now is whether
webcasters not part of the CRB hearing might still have to pay the rates
set by the board, minus the minimum fees.
Basically, this news qualifies as a reprieve, but internet radio won't
be truly saved until negotiations result in a workable royalty rate.
Another Update: This story has been confirmed by Kurt Hanson of RAIN.
-----
Westergren had more to say, lending insight into a process that was
largely opaque to non-participants. Apparently, the per-channel minimum
fees mandated by the Copyright Royalty Board were never taken very
seriously by those involved. They've now been taken off the table
completely, saving Pandora, Live365, and other multicasters from their
most imminent threat. Instead, per-station minimums will be capped at
$50,000 per year.
"No one thought those per station fees were remotely rational. It only
makes sense that they're being taken off the table."
As for the Copyright Royalty Board? They're entirely cut out of the
process, having set the rates and then refused a rehearing. Going
forward without the royalties being collected, SoundExchange and
webcasters will negotiate a new royalty rate with Congress looking over
their shoulder -- "and last but not least, the public looking over
Congress's shoulder." Alternatively, Congress now has time to consider
the Internet Radio Equality Act, which would set webcaster royalties at
7.5 percent of revenue and allow them to continue operating pretty much
as they have been.
Either way, this is a big win for webcasters and their listeners.
Again, this is a reprieve, and internet radio can't be considered saved
until new rates are set that everyone can live with.
--
David Solomonoff, President
Internet Society of New York
[EMAIL PROTECTED]
isoc-ny.org
_______________________________________________
Discuss mailing list
[email protected]
http://lists.isoc-ny.org/mailman/listinfo/discuss
