Washington, D.C. (May 29, 2007) – SoundExchange, which represents recording companies and artists, 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. SaveNetRadio, a coalition of artists, labels, listeners, and webcasters, responded that the proposal “would throw ‘large webcasters’ under the bus and end any ‘small’ webcaster’s hopes of one day becoming big.”
According to a statement by SoundExchange, the offer to extend the core SWSA terms represents a continued subsidy for these small webcasters in the form of lower payments to artists and content owners. The offer comes as a direct response to a request from the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property to “initiate good faith private negotiations with small commercial and noncommercial webcasters with the shared goal of ensuring their continued operations and viability.”
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. While the subsidy is an effort by SoundExchange to address alleged weaknesses of the small webcasters’ businesses, SoundExchange noted that this proposal is an adjunct to the CRB process.
“Labeling webcasters small or large is a distinction without a difference,” stated SaveNetRadio spokesperson Jake Ward. “Two of the most prominent webcasters, Pandora.com and Live365 are models of industry success but would be bankrupted by the CRB and by the SoundExchange proposals.” By broadcast radio standards, according to SaveNetRadio, even the largest webcasters, such as the internet radio divisions of Yahoo! and AOL, are small broadcasters.
According to SaveNetRadio, “The revenue caps SoundExchange is proposing are an extension of those put in place during the 2000-05 period, which created an insurmountable barrier to growth for small webcasters. This revenue cap has had the perverse and unintended consequence of forcing thousands of webcasters to stay small if they want to stay alive, thereby weakening the industry – the very opposite of Congress’ intention.”