Royalty collector and distributor SoundExchange and the web-based music community have come to an agreement on royalty rates that are expected to give the latter group a better chance to survive than would have existed under terms handed down earlier by the Copyright Board. Generally, the compromise measure divides webcasters into three groups and determines payments by billing the percent of a site’s income or by using a per-song rate, whichever is higher.
The contract is retroactive to 2006 and runs through 2015.
Webcasters are divided into three types. The dividing line between large and small is $1.25M in annual revenue; the third type including those that provide bundled, syndicated or subscription services. All must be pureplay web-only entities.
Large webcasters may have to pay only 25% of revenues, but it is expected that most will end up paying the per song rate. However, it is way down from the $0.0019 per stream in the original Copyright Board decree. It will be set at $0.0008 for 2006 and rise incrementally to 0.0014 in the last year of the agreement. Terms for smaller webcasters are somewhat more lenient, and the third type will follow the agreement struck with NAB for AM-FM web streaming, which calls for per-song fees of $0.0015 in 2009, sliding to $0.0025 in 2015.
Participants will pay an annual minimum fee of $25K which will be applied to their final bill.
RBR/TVBR observation: The agreement is said to be experimental by SoundExchange, and we’ll have to see if it really contains the survival value attributed to it. But we think SoundExchange should be ecstatic, because without it, they would likely have nobody to bill within a few short years.