soundexchange

Internet radio got a break Tuesday when the sector reached an agreement on streaming-music royalty rates with SoundExchange, the group that collects royalties on behalf of artists and labels.

The two sides announced the deal, which comes after more than two years of negotiations, political maneuvering, and fans pleading with lawmakers to save Webcasting. It should be noted, however, that Webcasters are still at a disadvantage when competing with traditional broadcast radio. Over-the-air stations aren't required to pay royalty rates to artists or labels.

Steve Marks, an executive vice president for the Recording Industry Association of America and one … Read more

Few people know this but for a little while last year, the music-royalty rates that Web radio stations have complained about for years appeared to be behind them.

In a midtown Manhattan law office last November 6, representatives from Webcasting companies and SoundExchange, the group that collects royalties for recording artists and labels, struck a deal "in principle," said sources familiar with the negotiations. The agreement was designed to restructure the royalty rates Webcasters have long said would decimate the sector.

But a week ago, came word that a final deal was never signed. The Digital Media Association (DiMA), the group that represents most of the largest Webcasters, including Pandora, Live365 and Yahoo, announced that the parties failed to reach an agreement. How could that happen? Both sides told members of Congress in September that they were close to a deal. In November, the blog All Things Digital reported a settlement was within grasp and quoted Pandora founder Tim Westergren saying "all the hard stuff has been done."

After interviewing multiple sources on both sides of the issue, the picture that has taken shape is that Webcasters blew a golden opportunity to reach an accord that would have given them much of what they asked for. What appears to have happened is that some in Webcasting were willing to play a game of brinkmanship with SoundExchange. At the very least, the actions of some larger Webcasters undermine their claims that they can't afford to continue for much longer without a settlement.

There is still a chance the two sides can come to terms. Talks are ongoing. But as it stands, time is quickly running out and nothing has occurred to indicate a breakthrough is near, according to sources on both sides. If a settlement isn't reached, its conceivable that some Web radio stations that legitimately can't afford to pay the performance fees set by the Copyright Royalty Board (CRB) two years ago may be in jeopardy. Representatives from SoundExchange declined to comment. Westergren did not return repeated phone calls.

Did Real want a deal? There's no doubt who the music side blames for derailing the agreement. … Read more

Technology companies are supposed to be wide-eyed novices on Capitol Hill. I've read that they don't spread enough money around or aren't hip to the ways of Washington.

Regardless of whether that's true, this weekend saw Pandora, a struggling music service, whip up enough support among fans of Web radio to help persuade the House of Representatives to unanimously pass the Webcaster Settlement Act on Saturday, according to multiple people associated with the bill. The proposed legislation is designed to give Internet radio stations added time to negotiate a settlement with the music industry on reduced … Read more

Update at 5:50 p.m. PDT: The House actually did weigh in on the bill on Saturday, passing it unanimously by a voice vote.

Proponents of Web radio stations are predicting a very close vote in Congress on a bill that they paint as life or death.

The House of Representatives is set to vote Sunday on the Webcaster Settlement Act, which would allow Web radio stations to negotiate with the music industry for a royalty rate lower than what Congress mandated last year.

Companies like Pandora are seeking a reduced rate and say that they simply cannot afford … Read more

UPDATE Friday, 3:25 p.m PT: To include Pandora's letter to fans

Time is running out on a bill that could pave the way for Pandora and other Webcasters to pay reduced royalty rates, as traditional radio broadcasters are now trying to kill the legislation.

As Congress readies to adjourn, representatives of the National Association of Broadcasters are lobbying lawmakers to stop legislation that would allow anyone streaming music over the Web, such as National Public Radio and Pandora, to continue negotiating with SoundExchange, the body that collects statutory rates for the music industry.

SoundExchange and the Digital … Read more

With Congress due to adjourn Friday, lawmakers worked late Thursday evening to resolve a couple of high profile digital-entertainment issues.

A "Webcasting" bill was introduced in Congress on Thursday that would allow SoundExchange, the body that collects royalties on behalf of the music industry, to reach a settlement on royalty rates with the Digital Media Association (DiMA) after Congress adjourns.

SoundExchange and DiMA, which represents Web radio stations such as Pandora, have been at odds over the fees charged to stream music. Sources close to the talks say the introduction of the bill signals the two sides are … Read more

Tim Westergren, the founder of popular Web radio start-up Pandora, has said in an interview with The Washington Post that his company may be close to a shutdown.

"We're approaching a pull-the-plug kind of decision," Westergren said in the article, published Saturday. "This is like a last stand for webcasting."

The problem, he explained, is last year's royalty hike for Web radio, which makes it extremely expensive for an independent start-up to stay afloat in the business. The royalty increase will eat up 70 percent of Pandora's $25 million in revenue, Westergren said.… Read more

Looks like there's been a truce in the fight over Net radio.

After threatening to impose per-song performance royalties on Net radio stations, which could have increased costs for some Net broadcasters by hundreds of millions of dollars, royalty collection agency SoundExchange offered to delay the new royalty payments until 2008.

Savenetradio.org, a coalition representing Internet radio broadcasters, rejected that previous offer, saying that the threat of drastically increased fees in 2008 was little better than the July 15 deadline, as it would staunch any investment into Net radio. An eleventh-hour court appeal failed, and it looked like … Read more

Looks like the day of Net radio silence worked. Enough publicity was generated that SoundExchange, the organization responsible for collecting royalties on Internet radio broadcasts, has offered to impose a $2,500 maximum fee per broadcaster on July 15, rather than instituting the per-song fees that could have put many small broadcasters out of business and raised costs for big broadcasters into the tens or hundreds of millions (!) of dollars.

Nonetheless, it's only a temporary reprieve: the original fee increase will still go into effect in January 2008, if SoundExchange has its way. SaveNetRadio, the group that organized the … Read more