Music webcasters were struck a crushing blow earlier this month when the Copyright Royalty Board decided to approve the royalty rate proposal put forward by SoundExchange, a formerly RIAA-associated royalty collection organization that charges webcasters licensing fees to stream music, which it will ostensibly disburse to artists and labels who register their recordings. (SoundExchange also collects money on behalf artists who don't register, which it keeps until they do, which they might never).
The Digital Media Organization, or DiMA, which represents webcasters threatened by the decision, offered another proposal that would enable webcasters to survive, and (predictably) objects to the board's selection of SoundExchange's proposal.
Jon Potter, executive director of DiMA, thinks the organization will be able to appeal in the Washington, D.C. Second Court of Appeals successfully for two reasons, as he said on a recent Inside Digital Media podcast:
There is "no underlying justification" for the $500 per station royalties put forward by the bill, which would cause Live365 to owe about $5 million, due immediately. (SoundExchange claims it needs $500 a year per station from webcasters -- no matter how few hours it streams per year or how few people hear it -- to cover their administrative costs.)
In their 115-page decision, the judges offered "less than 30 pages of analysis, and, in fact, there was no analysis of why the judges picked the [SoundExchange-proposed] system that they picked. They merely said 'we like this proposal better.' There was no analysis of why this proposal was more in tune with the regulatory, legal standards... which is pretty shocking."
Hmmm... why would the judges decline to divulge the reason(s) behind their selection of the major labels' webcast-killing proposal over an alternate that would have enabled more diverse, decentralized programming (while still compensating copyright owners)? Hopefully that will surface during the appeal, but for now, one conspiracy theory's as good as the next.
(image from sommersdale)
