For Net Broadcasters, Some Relief

A little political pressure has worked – at least for now – and is going to keep the Internet radios blasting through 2010 without many changes to the royalty structure if a deal can be put in place. SoundExchange, the trade group that has been pushing hard to boost the royalty rates paid out by the Internet radio broadcasters, today “offered to extend to small webcasters through 2010 the terms of prior legislation known as the Small Webcaster Settlement Act (SWSA) with some minor modifications.” This offer is only for small webcasters and defers the new rates set by the CRB on May 1, 2007, retroactive to January 1, 2006 and effective through 2010, a SoundExchange press release.

According to expert Kurt Hanson, that offer translates to upto 12% of the total revenues in some cases. If the annual gross revenue is upto $250,000 then the royalty rates are 10% of the total gross revenue. The rates increase to “12% for all gross revenue above that amount,” Hanson notes. While this is a step in the right direction but exactly a long term solution. Some broadcasters have told us privately that they are not too thrilled by this gesture, and are looking for a long term resolution.


* Air of despair permeates Music Nets
*, Pandora KO-ed by new royalties.