The large American webcasters have reached a deal with the record industry in its long running dispute over online royalties.
As previously reported, the US Copyright Royalties Board earlier this year backed SoundExchange, the US record industry's digital royalties body, in its bid to force up the royalties paid for music played on online radio stations. The webcasters argued that the new rates were far too high, put them at a huge disadvantage to traditional and satellite radio, and would put many of them out of business. Although the CRB refused to reconsider the royalty hike, the webcasters garnered considerable support in political circles, leading to legislation proposals which would overrule the CRB's decision by locking online royalties to satellite radio royalties.
But according to Billboard the dispute between the larger webcasters and SoundExchange is now over. A deal seems to have been struck which offers webcasters the minimum charge cap already offered by SoundExchange, but without any of the conditions that originally came with that offer. The CRB rules meant that radio stations were obligated to pay a $500 per station minimum charge per year. If a webcaster ran thirty stations/channels, they would have to pay $500 thirty times. The new offer caps the minimum charge at $50,000, meaning that any webcaster running ten or more stations will pay the same minimum rate.
When SoundExchange first offered the minimum charge cap it came with other conditions, in particular an obligation on the webcasters to implement technology that stops their streams being ripped by users. Although those webcasters involved in this new deal, which include AOL, MTV, Real, Pandora, Yahoo! and Live 365, have agreed to cooperate in investigating the development of such technology, they are not obliged to introduce it on any fixed timescale.
It will be interesting to see how this deal affects the smaller webcasters, many of whom said the new CRB rates would put them out of business. Many of those companies don't run more than ten channels, so the minimum charge cap is irrelevant. The big webcasting players positioned themselves as the champion of their smaller competitors when wanting to position SoundExchange as the bad guys in this dispute (ie "we may be a big multi-national conglomerate also, but we're fighting those evil record companies for the good of the little guys) - it will be interesting to see if their concern for the little guy continues now they themselves have reached a settlement with the record industry.