SoundExchange offers deal to small webcasters

With momentum growing in Congress to throw out the web streaming royalty rates adopted by the Copyright Royalty Board and impose more reasonable fees, SoundExchange - the organization set up to collect royalties for record companies and performers - has proposed what it is calling a "subsidy" for small webcasters.

Instead of the CRB rates, which most webcasters large and small say would take well over 100% of their revenues, SoundExchange is offering a temporary reduction through 2010. Under the offer, small webcasters would pay a royalty fee of 10% of gross revenues up to 250K and 12% for all gross revenue above that amount.

RBR observation: Divide and conquer. It's the oldest trick in the book. Note, though, that the "subsidy" proposed by SoundExchange is only temporary. After just a few years the small webcasters would be subjected to royalty rates that are certain to force them out of business.

Frankly, we can't understand why SoundExchange is pressing so hard for royalty rates which will produce zero in payments for it to disperse. No one, large or small, can come up with a viable business model for web streaming under which you pay someone else more than 100% of your revenues.  Have an opinion on this article? Post your comment below.

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