DiMA Wants ‘Full Term’ Per-Channel Offer from SoundExchange, in Writing
In light of SoundExchange’s offer of a $2,500 cap on total royalties arising from the $500 per-channel fee in the Copyright Royalty Board’s (CRB) webcasting ruling, the Digital Media Association (DiMA) wants that offer to run the full term of the CRB ruling, through 2010. The offer responds to multi-stream webcasters’ fears that at $500 per stream they could be on the hook for more than $1 billion. The fee would apply no matter how many channels or stations a webcaster streams. Pandora lets users create their own customized stations, Live365 streams thousands of do-it- yourself stations, and some public radio stations offer general and niche streams, such as WAMU Washington’s BluegrassCountry.org.
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The SoundExchange offer that DiMA got earlier in writing would expire after 2008, DiMA Executive Director Jonathan Potter said. “Any offer that doesn’t cover the full term is simply a stay of execution for Internet radio. The looming 2009 billion-dollar threat is destabilizing and inhibits investment and growth,” he said. Alluding to a webcaster complaint at last week’s House Small Business Committee hearing (CD Jun 29 p8), Potter said SoundExchange was negotiating through “press releases” and not directly with DiMA.
The SoundExchange offer is “another misleading attempt to negotiate with public relations and not with substance,” said the SaveNetRadio Coalition. Per-song royalties and “looming threats of billion-dollar minima” repel long-term investment, the group said. “What has been proposed falls well short of even the lowest standard of a temporary fix,” it said.
SoundExchange Executive Director John Simson faulted webcasters for putting words into the collecting body’s mouth, echoing recent comments by another official that SoundExchange did not know what the CRB meant by “channel” or “station”. “There was a lot of misunderstanding out there about how the minimum fee would apply, and frankly some people were wrongly stating SoundExchange’s policy on this matter,” he said. Webcasters themselves failed to raise the thorny question of how to pay royalties on multiple streams from the same company in the CRB proceedings, General Counsel Michael Huppe said. A SoundExchange spokesman could not immediately tell us whether SoundExchange itself discussed how to handle multiple streams in the proceedings.
Rep. Jay Inslee, D-Wash., a sponsor of the Internet Radio Equality Act, is “encouraged” by the SoundExchange offer, and “hopes the parties are able to negotiate a solution,” a spokeswoman told us. Inslee told last week’s committee hearing the per-channel provision was a “secret little nuclear weapon.”
NPR and the Corporation for Public Broadcasting likely will meet next week with SoundExchange to resume talks on rates, an NPR spokeswoman told us. SoundExchange is in “active negotiations” with small commercial and noncommercial stations for rates similar to those in the Small Webcaster Settlement Act of 2002, it said.