SoundExchange reaches Web royalties deal
SoundExchange Inc., an organization that collects royalties for musicians and record companies, agreed with a group representing Internet broadcasters to cap fees at $50,000 a year per webcaster. — The webcasters agreed to provide the agency …
Context & Ripple Effects
This deal is the negotiated endgame to the Copyright Royalty Board's March ruling, which sided with SoundExchange's per-performance rates and left webcasters facing fee schedules many said would put them under. Within weeks SoundExchange was floating concessions — first a discounted rate through 2010, then dropping the DRM requirement it had demanded in July after webcaster pushback.
What changed on August 24 is that talk became terms: a $50,000 annual cap per webcaster, with broadcasters supplying SoundExchange the reporting data those fees depend on. Notably, Billboard.Biz framed the same story as an accord between major labels and *large* webcasters, suggesting the settlement reached beyond just the small-broadcaster tier — even though smaller operators had publicly opposed the temporary reprieve days earlier.
First-order effects
- Small webcasters get immediate relief from the CRB's per-performance rates via the $50,000 annual cap, but must hand SoundExchange the usage data required under the deal.
- SoundExchange keeps revenue flowing and its reporting pipeline intact instead of collecting nothing from webcasters forced off the air.
Second-order effects
- The large-webcaster tier named in Billboard's coverage gets its own negotiated track, splitting internet radio into separately priced classes rather than one uniform rate card.
- With the discount only running through 2010, webcaster lobbying shifts toward a permanent legislative or CRB fix rather than year-by-year survival deals.
Third-order effects
- Internet-radio economics are being settled by private negotiation layered on top of CRB rulings — a pattern that makes SoundExchange's terms, not the Board's schedule, the real rate-setting mechanism.
- Reporting-data requirements embedded in these deals strengthen SoundExchange's position as both collector and auditor, raising the compliance bar for any would-be webcaster.
The trend: Webcasting royalties are moving from CRB-set schedules toward negotiated SoundExchange settlements with tiered caps and data-reporting strings attached.