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RAIN 02/09: SoundExchange to submit unilateral license offer to Congress

Posted on: 02/09/2009


Billboard.biz reports (here) this morning that SoundExchange has e-mailed a “Small Commercial Webcaster Settlement Agreement” to a group of smaller webcasters on Friday, in which the webcasters would be required to give up variety of rights to qualify for royalty rates essentially the same as those in 2002’s Small Webcaster Settlement Act (SWSA). SoundExchange told webcasters that they intend to submit the license to Congress this week with or without input from webcasters.

The document is inappropriately named in that it is not the result of negotiations with the CRB-participant webcasters officially designated as the “Small Commercial Webcasters (SCW).” That group, represented by David Oxenford and including AccuRadio, Radioio, Digitally Imported, and others, is still trying to reach a negotiated settlement with SoundExchange. The actual Small Commercial Webcasters group and SoundExchange have 6 more days to reach a settlement, as per terms of the Webcaster Settlement Act (RAIN coverage here). Negotiations are presumably also underway between SoundExchange and other CRB-participant groups such as DiMA members and NAB members.

The unilateral license offer does include a useful element for the “hobbyist” webcaster (with less than $5,000 per year in revenues and $10,000 per year in expenses): a new “microcaster” category with less cumbersome usage reporting obligations.

RAIN ANALYSIS: The spirit of the Webcaster Settlement Act passed last fall was to allow agreements to be negotiated between SoundExchange and the various parties who participated in the CRB, and to give them the force of law. As far as we can tell, this is not such an agreement. — PM

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  1. SoundExchange’s latest proposal might be more accurately titled the “Keep the Small Webcasters Small Forever Agreement”. In fact, it’s potentially worse, in that its terms essentially force a business model that is unsustainable, and make it impossible to escape that situation—if you grow beyond its bounds, or merge with another company, you have to pay the higher royalty rate, retroactive to 2006. (Would this also require you to retroactively conjure up data to meet the “big boys’” reporting requirements?)

    This appears to be not only yet another of SX’s “divide-and-conquer” propaganda/negotiating ploys, but a sure-fire way to handcuff the small webcasters until they go out of business.

    Art Marriott · Feb 9, 09:39 AM · #

  2. Note that the ‘microcaster’ ATH cap of 18067 would mean that a station would literally have to have less than a single consecutive listener for the year.

    Even an iota of listenership, and you’re instantly bumped to the next level.

    If this is “firing on all cylinders”, then we’re all screwed.

    bhance · Feb 9, 10:10 AM · #

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