Streaming Royalty Fees on Hold

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Washington - Jul 24, 2007 - The law requiring Internet radio broadcasters to pay increased royalties is being postponed indefinitely pending negotiations between Sound Exchange, representing record companies and artists, and the Digital Media Association (DiMA), representing webcasters.

The Copyright Royalty Board, part of the U.S. Library of Congress, set the fees, which technically went into effect July 15. Beginning in 2006, the new rate was 0.08 cents per listener, per song, with an annual $500 fee per channel, per station. In 2010, the rate will rise to 0.19 cents. Companies also owed retroactively from the beginning of 2006. In light of this, many small stations shut down, but they were still responsible for royalties owed since January 2007.

In the ongoing talks, Sound Exchange is offering a $500 minimum/$50,000 maximum annual fee to webcasters who must report everything they play and adopt technology to prohibit users from streamripping. This compromise would only be available to smaller radio operators, as Sound Exchange Executive Director John Simson said, "We expect commercial webcasters like Yahoo and AOL to pay the new royalty rates set by the CRB." DiMA on the other hand is lobbying for the Internet Radio Equality Act, which sets the rate on a percentage of revenue, such as those paid by satellite radio stations.

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