Webcast news: Royalty deal set

Annual cap for major streaming services is $50,000

Major record labels and performance rights organization SoundExchange on Thursday reached a deal with the large webcasting services over crucial terms covering royalty rates that webcasters must pay to stream sound recordings through 2010, sources said.

Under the deal, reached during a confidential meeting in New York, large commercial webcasters AOL, Live365, MTV, RealNetworks, Pandora and Yahoo will not have to pay more than $50,000 a year per service as a per-station or per-channel minimum royalty to webcast sound recordings, according to a source close to the negotiations. Under the Copyright Royalty Board decision this year, there was no limit to the $500 per-channel or per-station minimum fee that services must pay to SoundExchange.

Also, the large webcasters will not be required to implement any particular kind of technology to prevent the streamed music from being ripped, or copied, by users, the source said. But the services have agreed to cooperate and discuss implementation of anti-stream ripping technology on their services with labels and artists.

Representatives from all the major labels and the large digital services were present at the meeting, according to the source.

No final agreement has been reached yet with small webcasters. SoundExchange sent a letter to them this week offering to carry forward old rates through 2010, which is the last year for which rates were set by the CRB under copyright regulations.

SoundExchange is an independent, nonprofit group designated by the U.S. Copyright Office to collect and distribute digital performance royalties. It represents more than 3,000 labels and 20,000 artists.

Also on Thursday, the Digital Media Assn. said its member services will begin providing SoundExchange with full census reporting, which identifies all music performed 24/7 on the stations rather than samples of recordings streamed.

This information is an important tool to enable SoundExchange to accurately distribute royalties, especially to independent labels and artists whose music may not be included in sample reporting. The census reporting will begin in six months.

Also, SoundExchange and DiMA will form a committee to evaluate the issue of stream ripping and potential technological solutions.

"This agreement marks an important first step in the Internet radio royalty negotiation process," said Jonathan Potter, executive director of DiMA. "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."

SoundExchange executive director John Simson said: "With the small webcaster agreement we sent out earlier this week, with progress on the noncommercial 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."
comments powered by Disqus