RAIN: Radio And Internet Newsletter: RAIN 02/11: Digital Music News says SoundExchange royalty proposal "fishy"

RAIN 02/11: Digital Music News says SoundExchange royalty proposal "fishy"
·Feb 11, 12:43 PM
Posted by: Michael Schmitt

WEBCASTER “DEAL” FULL OF “UNCOMFORTABLE HANDCUFFS”

SoundExchange’s misleadingly named “Small Commercial Webcaster Settlement Agreement” emits a “fishy smell,” according to Digital Music News. The document is not the result of negotiations with the CRB-participant small commercial webcasters, as the title indicates, yet SoundExchange will submit the “deal” to Congress with or without input from webcasters (RAIN coverage here).

The proposal’s provision that any company buying a small webcaster must pay the full statutory rates retroactive to 2006 “are uncomfortable handcuffs, even if the prospects of a sale are slim,” writes Digital Music News (here).

One broadcaster told the publication, “It raises questions about the fairness of the entire process if you are going to subject people to certain rates, but then prohibit them from exercising basic rights to challenge those rates.” Webcasters agreeing to SoundExchange’s proposal would not be allowed to participate in any CRB proceedings to determine royalty rates for 2011-2015.

According to the terms of the Webcaster Settlement Act (RAIN coverage here), a deal must be reached by February 15.

SIRIUS XM PREPS BANKRUPTCY FILING

The merged satellite radio giant Sirius XM has reportedly

hired advisers to prepare for a Chapter 11 bankruptcy filing. The New York Times points out (here) that the companies “never turned a profit” when independent and have racked up $3.25 billion in debt. A Sirius XM bankruptcy is expected not to interrupt service for subscribers, though “the company might have to terminate contracts with high-priced talent like Mr. Stern or Martha Stewart.” Tom Taylor speculates in his Radio-Info newsletter that a Chapter 11 filing could be a move against EchoStar buying Sirius XM. “The protective curtain of Chapter 11 reorganization” could help Sirius XM survive or get better terms out of “hardball negotiations with EchoStar,” writes Taylor. EchoStar has purchased $400 million of Sirius XM’s debt. A bankruptcy filing could come within days, the Times reports.

RADIO INK PUBLISHES CONVERGENCE PANEL SUMMARIES

Radio Ink has published summaries of panels from Radio Ink Convergence ’09 here. Included is coverage of the “Interactive Strategies of Radio Companies” panel, moderated RAIN publisher Kurt Hanson (found here).

INDY STAR REPORTER SAYS PERFORMANCE ROYALTY COULD KILL ALREADY STRUGGLING RADIO

Indianapolis Star reporter Erika Smith writes that a broadcast radio performance royalty would put even more economic stress on an already

fragile industry—perhaps even causing some broadcasters to “go under.” She accepts the argument that radio has less promotional power today than it has in the past, but asserts that “most Americans still listen to good ol’ AM and FM stations (shocking to Sirius XM fans, yes, I know) …levying what will likely be millions of dollars worth of fees on an already struggling industry will make broadcasters’ financial plight that much harder.” Read her article in full here.

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