US radio station KCRW has revealed some of the requirements demanded by American internet royalties body SoundExchange in return for concessions with regards the proposed royalties hike.
As previously reported, the US Copyright Royalties Board has proposed an increase in the royalties internet radio stations should pay record labels for the music they play. The webcasters claim that the proposed increases are unfair and unreasonable, and will put many smaller web radio stations out of business. The CRB has refused to review their decision, but after much political lobbying on the web radio sector's part, proposals (the Internet Radio Equality Act) are working their way through Congress to have the law changed so that webcasters would not pay royalties according to the rates set by the CRB, but will pay similar royalties to the satellite radio sector.
Behind the scenes SoundExchange, who lobbied for the increases approved by the CRB, have been doing some negotiating in a bid to stop the whole thing going political. But Celia Hirschman of KCRW says those concessions have, so far, not been good enough for them, and that they come with requirements that the web radio stations are unwilling to commit to - in particular formally withdrawing their support from the Internet Radio Equality Act. The concessions being proposed by SoundExchange would also only run for the first 18 months, meaning new negotiations would have to begin at the end of 2008.
Hirschman concludes: "The CRB decision will have disastrous results on major music webcasters. Live 365 would face $10 million dollars in royalty fees. Yahoo, Real and Pandora collectively owe over a billion dollars in royalties. None of these organizations generate a fraction of income from streaming to possibly pay these fees".
In theory the CRB's new royalty rates kick in on 15 Jul. It will be interesting to see what happens on that date, and what action SoundExchange will take to secure their money.