Sound Exchange Offers Small Webcasters Discounted Rate Agreement Through 2010

August 24, 2007


Washington - Aug 21, 2007 - In response to concerns expressed by many small commercial webcasters, and following a request made by Congressmen Howard Berman (D-CA) and Howard Coble (R-NC), Sound Exchange began sending formal offers to qualified small webcasters that would allow them to continue operating through 2010 under essentially the same terms they have enjoyed under the Small Webcaster Settlement Act (SWSA). This offer means that qualified small commercial webcasters would be guaranteed the same rates through 2010 that they have received since 1998 for the use of sound recordings owned by Sound Exchange members. Sound recordings of non-members would still be subject to the new rates.

Although webcasters large and small have begun paying under the new rates, and given that negotiations are ongoing, it had remained unclear to many small webcasters what their obligations would be going forward. As part of the agreement, small webcasters (defined as those earning $1.25 million or less in total revenues) would pay royalty fees of 10 or 12 percent of revenue. The proposal also includes a usage cap to ensure that this subsidy is used only by webcasters of a certain size who are forming or strengthening their businesses.

Small webcasters have until Sept. 14, 2007, to accept the agreement. Small webcasters who do not sign the agreement but continue streaming will be responsible for paying the new rates first announced by the Copyright Royalty Judges in March, the first payment of which was due July 15, 2007.

Several small webcasters not party to ongoing negotiations have been asking for the opportunity to enter agreements based on Sound Exchange's offer of May 22, and Sound Exchange is responding to those requests by sending agreements directly to small webcasters.


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