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RAIN 02/13: Deadline looms for webcaster royalty deals

Posted on: 02/13/2009


Royalty rate negotiations between SoundExchange and webcasters are presumably underway as the February 15 deadline fast approaches. Only a deal for public broadcasters has been announced. Nothing has been heard as of yet from the Digital Media Association (DiMA), from the NAB, or from Small Commercial Webcasters concerning an agreement with SoundExchange.

The February 15 deadline was set by the Webcaster Settlement Act (H.R. 7084). Passed by Congress in late October 2008, the legislation gave SoundExchange and Internet radio broadcasters the legal authority to settle the webcaster royalty rate debacle for both the 2006-2010 and 2011-2015 terms after the 110th Congress adjourned (RAIN coverage here).

This past week, SoundExchange sent out what they called the “Small Commercial Webcaster Settlement Agreement” (RAIN coverage here). The so-called “agreement” — not the result of negotiations with the CRB-participant group called “Small Commercial Webcasters” — would require webcasters to give up a variety of rights to qualify for royalty rates essentially the same as those in 2002’s Small Webcaster Settlement Act (SWSA). Provisions include barring all agreeing webcasters from CRB proceedings to determine royalty rates for 2011-2015, setting an annual revenue cap of $1.25 million, and requiring larger companies purchasing a small webcaster to pay royalties retroactive to 2006 under the CRB-set royalty rate. Digital Music News called the proposal “fishy” and full of “uncomfortable handcuffs.”

In January, public broadcasters completed a deal with SoundExchange which settled on a $1.85 million royalty payment for the 2006-2010 term. The agreement included over 450 public broadcasters, including NPR and CPB-supported stations. The deal also requires “usage reports,” detailing song and artist play, and for NPR to withdraw its appeal of the 2007 CRB royalty determination (RAIN coverage here).

Check back to RAIN for continuing coverage of the webcaster royalty discussions, as new developments surface.


Google announced Thursday that it will be ending its broadcast radio ad service because it didn’t have “the impact we hoped for.” The company will instead be focusing on ads for online radio. VP of Product Management Susan Wojcicki writes at Google’s blog that the Google Audio Ads and AdSense for Audio products will be phased out. “Instead we will use our technology to develop Internet-based solutions that will deliver relevant ads for online streaming audio,” she writes (here). Tom Taylor observes in his Radio-Info email that “the kind of match-up service that Google provides might work better for Internet-only radio.”

Google entered the radio ad business in 2006 after acquiring dMarc Broadcasting. Up to 40 Google employees working on Google’s radio ad program may be let go. This announcement comes three weeks after Google pulled the plug on its Print Ads program for newspaper media (RAIN coverage here). For more, read The New York Times’ coverage here.


The “Local Radio Freedom Act,” a resolution opposing any new performance royalty for broadcast radio, entered Congress on Thursday. The resolution comes a week after the Performance Rights Act was introduced to Congress (RAIN coverage here). Reps. Gene Green (D-TX) and Mike Conaway (R-TX) introduced the anti-performance royalty bill in the House, backed by 110 cosponsors.

The resolution states that, “Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over-the-air, or on any business for such public performance of sound recordings.” The resolution was originally introduced last year in the 110th Congress with 55 cosponsors, eventually ending up with 220 backers. For more, read the National Journal’s coverage here.

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