Sound Exchange Offers Cap On Minimum Royalty Fees

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Sound Exchange Offers Cap On Minimum Royalty Fees

Jul 3, 2007 10:05 AM

Washington - Jun 29, 2007 - Sound Exchange has proposed a voluntary cap on the minimum fees charged against royalties for sound recordings played on Internet radio. Sound Exchange proposed capping such advance payments at $2,500 per service.

Recently enacted regulations that go into effect on July 15 require each webcasting service to pay a $500 minimum fee "per station or channel" regardless of the overall number of stations/channels it streams. By making this offer, Sound Exchange hopes to address certain webcasters' concerns about their liability for per-channel minimums.

Sound Exchange has begun discussions with the Digital Media Association to determine the most effective means for implementing this policy as broadly as permitted under the law. "The idea that the per-channel minimum might have a disproportionate impact on certain Internet radio stations was never presented to the Copyright Royalty Judges," said Michael Huppe, general counsel of Sound Exchange. "Nonetheless, at the request of Congress, we are trying to work with the small subset of affected webcasters, and are offering this proposal in the hopes of addressing those concerns."

Sound Exchange is also currently in active negotiations with small commercial webcasters and non-commericial webcasters such as public radio and college stations to provide what the organization considers to be below-market rates under terms similar to those of previous years under the Small Webcaster Settlement Act. The minimum cap and non-comm webcasters proposal is being touted by Sound Exchange as a "good faith effort" to address the elements of the recent webcasting ruling that have the concern of Congress and individual webcasters.

Sound Exchange maintains that it simply wants to see artists and labels fairly paid for the music they provide while ensuring that Internet radio grows and flourishes.

"There's no question the new rates set by the Copyright Royalty Judges are fair and are reasonable in the current market. In proposing these various accommodations to webcasters (especially small and non-commercial webcasters), Sound Exchange has taken the initiative to attempt to address the concerns that have been raised by Congress and affected webcasters." Said John Simson, executive director of Sound Exchange.

It appears that Sound Exchange still doesn't understand that its actions are ensuring the failure of Internet radio.