Posted by: Olga Kharif on August 23, 2007
It looks like Webcasters got exactly what they asked for. On Aug. 23, music industry rep SoundExchange and the Digital Media Association (DiMA), representing Web radio stations, shook hands over an agreement that will establish a $50,000 cap on royalty payments any given radio service has to make for spinning songs.
The agreement is a huge win for large Web radio companies like Yahoo Music and Pandora which, under earlier SoundExchange proposals, would have had to hand over millions in royalties. The agreement should allow Yahoo Music to turn profitable this year, I believe. Indeed, the $50,000 cap is what Webcasters have asked for all along.
Earlier this week, SoundExchange made yet another peace offering: It offered favorable royalty payment terms to smaller Webcasters. Taken together, the two proposals mean that the long-standing dispute between the music industry and Web radio is drawing to a close. Web radio listeners can breathe a collective sigh of relief.
It looks like, at the end, Webcasters — whose revenues, small today, are growing fast — got a very good deal.