NAB, SoundExchange Reach Accord on Music Webcast Royalties

Authored by Mark Hefflinger on February 17, 2009 - 12:48pm.

Washington - Commercial radio stations represented by the National Association of Broadcasters (NAB) have reached an agreement on music webcasting royalty rates with SoundExchange, the entity set up by major record labels to collect and distribute digital royalties. Under the new deal, which replaces terms set by the Copyright Royalty Board in 2007 that were near-universally decried by webcasters as too high, royalty rates will be lowered by 16% for 2009 and 2010, before gradually increasing through 2015.

"By ensuring the continued viability of Internet streaming for America's radio stations, today's agreement further strengthens the relationship between free, local radio and our 235 million weekly listeners," said NAB executive vice president Dennis Wharton.

The deal between NAB and SoundExchange covers the online radio stations operated by large commercial broadcasters like Clear Channel and CBS Radio.

Meanwhile, the Digital Media Association (DiMA), which represents large webcasters like RealNetworks, Pandora and MTV, did not reach a royalty rate agreement with SoundExchange by the Feb. 15 deadline set out in the Webcaster Settlement Act last year.

"Many points were agreed upon, but we are unable to resolve our principled differences regarding the applicability of sound recording performance royalties to various activities of multifaceted online companies, particularly when those activities and their revenue are not directly associated with the performance of sound recordings," said DiMA executive director Jonathan Potter.

"The need for side agreements and royalty rate reductions confirms that the CRB result was flawed and that the Copyright Act needs to be fixed.

"DiMA encourages Congress to review all of these issues when considering any amendments to the Copyright Act this Congress."

Related Links:
http://snipurl.com/c2qbt (AP)

http://snipurl.com/c2of7 (NAB statement)