June 28, 2009
Last October, Congress fulfilled Pandora founder Tim Westergren’s wish by passing the Webcaster Settlement Act. The bill gave Internet radio providers the opportunity to negotiate lower royalty rates with SoundExchange, a royalty-collecting branch of the RIAA, which had intended to double rates by 2010.
Now, after nine months of talks, many webcasters still have not reached an agreement with SoundExchange even though negotiation time is running out. Therefore, Congress has opted to give webcasters more time to find a proper royalty rate. Without the bill’s update, webcasters could face potentially bankrupting royalty rates. Once the Webcaster Settlement Act of 2009 is signed by President Obama, it will give webcasters an additional 30 days to negotiate reasonable royalty rates through 2010.
Affected webcasters include non-NPR noncommercial webcasters, religious webcasters, small “Pure Play” webcasters, and large webcasters associated with Digital Media Association. Digital Media Association represents Internet radio stations such as Pandora, Slacker, and Live365.com.
Jonathan Potter, Executive Director of the Digital Media Association, issued a statement following the Senate’s approval that commended Senator Ron Wyden and Senator Sam Brownback “for quickly pushing this bill through the Senate and on to President Obama’s desk for his signature.”
Potter also said, “Hopefully, as Congress continues to focus more broadly on sound recording performance rights legislation, more comprehensive legislation will soon level the regulatory playing field for all forms of digital radio.” Webcasters hope to reach royalty agreements similar to those of satellite and cable radio.
by Ben Benson