Posted by: Olga Kharif on May 23, 2007
Yesterday, SoundExchange, an organization that’s in charge of collecting royalties for music labels, has effectively extended an olive branch to small Web radio broadcasters, which have claimed that higher, recently established royalty rates would drive them out of business. Now, SoundExchange is offering to extend the old, lower rates through 2010.
Under pressure from Congress and consumer advocacy groups, SoundExchange is proposing that small webcasters pay royalty fees of 10% of all revenues under $250,000, and 12% of all sales above that amount.
That’s clearly good news for small Webcasters. But it remains to be seen if the proposal will be accepted. Many larger Webcasters believe their royalty rates are too steep, also. So far, Digital Media Association, representing Web radio stations, hasn’t issued any statements.