SoundExchange Offers Cap On Minimum Royalty Fees

Policy Reflects Artists' and Record Labels' Recognition of Special

Circumstances of Various Internet Radio Stations

Jun 29, 2007, 01:00 ET from SoundExchange

    WASHINGTON, June 29 /PRNewswire-USNewswire/ -- SoundExchange announced
 that it proposed a voluntary cap on the minimum fees charged against
 royalties for sound recordings played on Internet Radio. SoundExchange
 proposed capping such advance payments at $2,500 per service. Recently
 enacted regulations (due to go into effect on July 15) require each
 webcasting service to pay a $500 minimum fee "per station or channel"
 regardless of the overall number of stations/channels they are streaming.
 By making this offer, SoundExchange is addressing certain webcasters'
 concerns about their liability for per channel minimums.
     "There was a lot of misunderstanding out there about how the minimum
 fee would apply, and frankly some people were wrongly stating
 SoundExchange's policy on this matter," said John Simson, Executive
 Director of SoundExchange. "We certainly don't want anybody to get unduly
 hurt by the minimum fee, but there is a value to music and a cost to
 administering the digital royalty program, and we wanted to ensure that
 everyone was treated fairly -- artists, webcasters and record labels."
     SoundExchange has reached out to the Digital Media Association this
 week to discuss the proposal, including the most effective means for
 implementing this relief as broadly as permitted under the law. "The idea
 that the per- channel minimum might have a disproportionate impact on
 certain Internet Radio stations was never presented to the Copyright
 Royalty Judges," said Michael Huppe, General Counsel of SoundExchange.
 "Nonetheless, at the request of Congress, we are trying to work with the
 small subset of affected webcasters, and are offering this proposal in the
 hopes of addressing those concerns."
     SoundExchange is also currently in active negotiations with small
 commercial webcasters and non-commericial webcasters such as public radio
 and college stations to provide below-market rates under terms similar to
 those they enjoyed in previous years under the Small Webcaster Settlement
 Act. Together with this minimum cap proposal and its effort to accommodate
 small and non-commercial webcasters, the recording artists, independent
 record labels and large record companies that comprise SoundExchange have
 made a good faith effort to address the elements of the recent webcasting
 ruling that have been of concern to Congress and to individual webcasters.
     "I've said all along, we are in this together. We want to see artists
 and labels fairly paid for the music they provide and we want to see
 Internet radio grow and flourish," said Simson. "There's no question the
 new rates set by the Copyright Royalty Judges are fair and are reasonable
 in the current market. In proposing these various accommodations to
 webcasters (especially small and non-commercial webcasters), SoundExchange
 has taken the initiative to attempt to address the concerns that have been
 raised by Congress and affected webcasters." Simson also noted that, in
 yesterday's hearing on webcasting royalty rates before the U.S. House
 Committee on Small Business, the panel's ranking Republican, Steve Chabot
 of Ohio, concurred with Chairwoman Nydia Velazquez, D-N.Y., when she
 surmised, "I really don't think Congress is the best vehicle to resolve
 this type of issue."
     For additional information please visit
     Contact: Richard Ades or
              Gregg Perry

SOURCE SoundExchange