At today's Congressional hearing about the new rates for online radio that
would essentially destroy it , SoundExchange, which was scheduled to receive
the new royalty payments on Monday morning (since the enforcement date falls
on a Sunday), made a startling statement. 

The SoundExchange executive promised -- in front of Congress -- that
SoundExchange will not enforce the new royalty rates.  Webcasters will stay
online, as new rates are hammered out.  Whew! 

I just spoke with Pandora founder Tim Westergren, who expressed relief that
Pandora wouldn't have to shut down on Sunday in response to the new rates.
He said, "It was getting pretty close.  I always had underlying optimism
that sanity was going to prevail, but I was beginning to wonder." 

He said everyone who called their Congress person about this should feel
that they had an effect on the process: 

"This is a direct result of lobbying pressure, so if anyone thinks their
call didn't matter, it did.  That's why this is happening."  The flyer DiMA
distributed to Congress today probably helped a bit too, but overall, it
appears Congress intervened due to pressure from web radio listeners. 

Funnily enough, Westergren told me this mere hours after a representative of
SoundExchange told me 

SoundExchange told me three hours ago that the new rates are "etched in
stone."  That is obviously not the case. 

Westergren had more to say, lending insight into a process that was largely
opaque to non-participants.  Apparently, nobody ever thought those minimum
fee per channel fees would be taken seriously.  As of now, they have been
taken off the table completely, saving Pandora, Live365, and other
multicasters from their most imminent threat. 

"No one thought those per station fees were remotely rational.  It only
makes sense that they're being taken off the table." 

As for the Copyright Royalty Board?  They're entirely cut out of the
process, having set the rates and then refused a rehearing.  Going forward
without the royalties being collected, SoundExchange and webcasters will
negotiate a new royalty rate with Congress looking over their shoulder --
"and last but not least, the public looking over Congress's shoulder."
Alternatively, Congress now has time to consider the Internet Radio Equality
Act, which would set webcaster royalties at 7.5 percent of revenue and allow
them to continue operating pretty much as they have been. 

Either way, this is a big win for webcasters and their listeners.

 

mike

amature call M0DMD