SoundExchange Offers To Spare Small Webcasters from New Royalty Rates

As the fight in Washington intensifies over the new royalty rates for webcasters that are scheduled to go into effect on July 15th, SoundExchange has offered an olive branch to small webcasters, perhaps having realized that it's not in the best interest for the record industry in general to shut them down. This won't help larger webcasters like Pandora or Live365, but for the small or not-for-profit webcaster, the new deal could be a boon.

Billboard explains,

"SoundExchange is proposing that the royalties be based on a percentageof revenue at the rates under the SWSA: small webcasters would payroyalties equal to 10% of all gross revenue up to $250,000, and 12% forall gross revenue above that amount. But only those webcasters thatgenerate less than a specified amount of revenue andless than a certain amount of usage will be eligible for this lowerrate. This is to ensure that only those webcasters of a certain size,
who are forming or strengthening their businesses, get this break,
SoundExchange reports."

Following the Copyright Royalty Board's decision, sources close to thesituation told me that SoundExchange was surprised when the high rateswent through; this looks to be the case, as the organization appears tobe backing down on small webcasters. The next thing we need is forthem to lose the $500/month minimum charge per channel that makescustomized radio stations such as Pandora's, which probably offershundreds of stations for each artist in its catalog, financiallyunfeasable.