Big streamsers deal, small steamers do not


Large audio streamers are said to have come to an agreement with SoundExchange which would affect their operations through 2010. According to Billboard, in a closed door session, big internet streamers would have royalty liability capped at 50K per year and would not be forced to use any particular technology to prevent tune ripping by consumers. Meanwhile, SoundExchange has offered to give a royalty payment discount to internet audio streamers that bring in less than 1.25M per year. The offer is open until 9/14/07, and would provide a those companies with a reduced rate for four years, through 2010. The first streamers to comment are not enamored of the proposal. According to the Associated Press, operator Bill Goldsmith is one such streamer who has been in negotiation with SoundExchange, and he characterized its offer as an attempt to "divide and conquer" by separating small operators from other larger streaming entities, including major radio groups such as Clear Channel and internet companies such as Yahoo and AOL. And even with the offered rate of 10%-12% of annual revenues, the offer did not provide enough relief to allow many small streamers to remain in business. Another small streamer, Rusty Hodge of SomaFM said at the very least SoundExchange should match the US Small Business Administration definition of a small broadcasting company, which sees any company earning 6M in annual revenue or less as qualifying for that designation. Hodge added that many of the artists streamed by small players are independents who are not represented by SoundExchange, and would not be part of the SoundExchange offering.

RBR observation: Apparently progress has been made in this parallel issue to recording companies seeking the upheaval of the age-old content/promotion symbiotic relationship between themselves and broadcasters. It’s hard to see what benefit the recording industry expects to gain from not being aired on defunct internet music services. You would think that producers would treasure an armada of small music sites each of which can gather together base of serious, like-minded music fans, expose them to music which otherwise may be difficult to find, and in many cases offer a chance to buy that music instantaneously. Instead, music producers seem dead set on driving these companies out of business. Unbelievable.