February 17, 2009, 4:54 pm Still No Royalty Deal for Streaming Music Sites By Claire Cain Miller
Updated 8:40 p.m. http://bits.blogs.nytimes.com/2009/02/17/still-no-royalty-deal-for-streaming-music-sites/?pagemode=print The fate of Internet radio is still up in the air. Web sites that stream music have been fighting with the recording industry for two years over the royalties that the sites must pay for each song they play. Under last year’s Webcaster Settlement Act, the two sides had until last Sunday to reach an agreement. Simulcasters — FM and AM radio stations that also stream music over the Web — came to an agreement with the industry on Monday. But despite negotiating all weekend, independent Internet radio services like Pandora have so far failed to reach a deal. The disagreement is over the per-song fee, set to increase to 0.19 cents a song next year, that the Copyright Royalty Board has mandated that the Web sites must pay. The Web sites have argued that the rate would put them out of business. Instead of a per-song fee, many have argued, they should pay record labels a percentage of their revenue each year. According to several people involved in the negotiations, the two sides came very close to an agreement, but it fell through Monday because of a few sticking points. According to a copy of the proposed term sheet, big Web sites with significant advertising revenue would have paid the greater of 25 percent of their revenue or a per-song fee of 0.088 cents, increasing to 0.14 cents in 2015. Small Web sites with less than $1.25 million in revenue would have paid the greater of 7 percent of expenses or 10 percent of their first $250,000 in revenue and 12 percent of additional revenue up to $1.25 million. If a small Webcaster grows and brings in more than $1.25 million in revenue, the rates for big Webcasters would start to apply. That has rankled some small sites, which say it discourages them from growing. It is unclear what will happen next. Sheri Lapan, a spokeswoman for the Digital Media Association, which represents big Webcasters like Pandora, RealNetworks and MTV, said that no agreement had been reached but that the organization was open to continuing negotiations. Richard Ades, a spokesman for SoundExchange, the nonprofit organization that collects and distributes digital royalties on behalf of artists and labels, said the organization was still negotiating with some of the Webcasters represented by the Digital Media Association, “if not DiMA itself.” The parties will likely go to Congress at some point to ask for an extension to the Feb. 15 deadline. The disputed Copyright Royalty Board decision applied to all Internet radio Web sites. In the latest negotiations, Web sites have been treated differently depending on their size and business model. Simulcasters agreed to pay 0.15 cents per song this year, increasing each year to 0.25 cents in 2015. The agreement will ensure “the continued viability of Internet streaming for America’s radio stations,” Dennis Wharton, executive vice president of the National Association of Broadcasters, said in a statement. “It gives artists and copyright holders the opportunity to have more of their music played, while being fairly compensated,” John Simson, executive director of SoundExchange, said in a statement. Public radio sites, like npr.org, came to an agreement with SoundExchange on Jan. 15. The Corporation for Public Broadcasting will pay a single royalty payment of $1.85 million. If it streams more than 764.6 million hours of music between 2008 and 2010, it will pay 0.251 cents an hour. -- ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 Mail: antunes at uh dot edu *********************************** * POST TO [email protected] * *********************************** Medianews mailing list [email protected] http://lists.etskywarn.net/mailman/listinfo/medianews
