Web Radio Royalties Fight Far From Over

The record labels and Net Radio came to accord yesterday on a pretty big piece of their disagreement over music copyright royalties.

The Digital Media Association (DiMA), representing the webcasters, and SoundExchange, the royalties collecting arm of the Recording Industry Association of America (RIAA), agreed to a $50,000 per year cap on the $500 "minimum" fee webcasters must pay to the labels for every "station" or "channel" they operate.

Some of the bigger webcasters operate thousands and thousands of channels, while others like Pandora have built their business on allowing users to create their own channels. So the new $500 per channel charge passed in March by the Copyright Royalty Board (CRB) was a business plan killer for many.

The cap on the minimum fee is a big step, but it's only one part of the royalties picture. The sides still have some major work to do before this thing is sewed up. They still have to negotiate the per-song per-listener royalty rates themselves. And if they can find an agreement on that, they still have to get it all approved by the stodgy old dudes over at the Copyright Royalty Board, the ones who started this whole mess.

So contrary to some reports today (Net Radio Saved--For Now), the talks are far from over. Here's Jake Ward from the SaveNetRadio coalition:

"This agreement is a clear sign of progress in the ongoing negotiations between webcasters and SoundExchange and a very good first step toward a viable solution, but it is just the beginning. As the negotiation of recording royalty rates and terms continues, SaveNetRadio urges everyone involved to work in good faith toward a resolution."

The labels are talking as if the whole issue is solved. Here's SoundExchange executive director John Simson in a statement yesterday:

"SoundExchange has now addressed the key issues of concern with respect to the CRB rate-setting decision while still protecting the value of sound recordings. We now hope to move forward together with our partners, the webcasters, in providing an enhanced listening experience through Internet radio."

Not so fast, Mr. Simson. Have your assistant put a hold on that champagne order, and schedule another meeting with the webcasters.

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