Washington, DC (July 10, 2009)--A two-year battle between the record labels and internet radio stations has come to an end with an agreement on royalty rates through 2015.
The rates agreed by record label representative SoundExchange and so-called "pureplay" webcasters--those internet broadcasters who rely on music streaming rather than advertising for their revenue--promise to be less onerous than those imposed by the Copyright Royalty Board in 2007. The new agreement is retroactive from 2006.
The agreement was reached between SoundExchange and three pureplay webcasters, AccuRadio, Digitally Imported and radioIO, but may also be adopted by similar organizations. The agreement will be published in the Federal Register during July, after which webcasters will have 30 days to sign-on to the new rates.
Heralded by SoundExchange as offering "discount" rates from the CRB levies, the new agreement divides pureplay webcasters into large or small categories plus those that offer "bundled, syndicated or subscription services." The rates are approximately half those initially imposed by the CRB.
Large webcasters--those earning more than $1.25 million annually--will pay 25 percent of revenue or a per-performance rate that increases each year. All large webcasters will pay a minimum of $25,000.
Internet radio stations earning less than $1.25 million per year, or streaming less than a set monthly listener-hour cap, fall into the small category. These stations must pay the greater of a percentage of total revenue or a percentage of total expenses. For the period 2009 to 2014 that will be 12 percent for the first $250,000 and 14 percent beyond that; the percentage of total expenses is constant at seven percent. The agreement for those in the small webcaster category extends only through 2014.
Subscription services will pay the rates previously agreed between SoundExchange and the National Association of Broadcasters: $0.0015 per performance per stream for 2009, increasing to $0.0025 by 2015.
In exchange for the new, lower rates, pureplay webcasters will be required to maintain more comprehensive music streaming records, including "actual recordings played and total listenership," and must archive server logs for a minimum of four years. Small webcasters can dispense with the census records for a "proxy fee."
National Association of Broadcasters