NAB President and CEO David Rehr yesterday sent a letter to John Simson, executive director of SoundExchange, expressing "extreme disappointment" with a recent letter from the organization dismissing the "good faith" offer made 96 days earlier by NAB to resolve a rate-setting issue related to music streamed over the Internet. NAB’s original offer was made 6/6 in a meeting between execs from NAB and SoundExchange, an organization created by the international record conglomerates that comprise the RIAA to establish and collect royalties for digital sound recordings. For over 13 weeks, NAB received no response.
According to Rehr, the brief and belated response from SoundExchange mischaracterized the offer NAB made. "NAB participants left the June 6 meeting with the feeling that you understood the proposal and that you would represent it to the SoundExchange board. Certainly, if asked, we would have promptly responded to any questions or need for clarification," the NAB honcho wrote. Rehr said the proposal from broadcasters would have encouraged more radio stations to stream on the Internet "than would otherwise be possible under the misguided CRB rates." With more streaming activity, he noted, artists would actually receive more revenue than could be achieved under the CRB rates.
RBR/TVBR observation: With SoundExchange taking aim at the bigger revenue pot, with its Capitol Hill allies preparing a push to make AM and FM stations pay performance royalties for airing records, there may not be much interest from the SoundExchange side in coming up with a workable deal on streaming by those same AM and FM stations. That’s too bad, since SoundExchange is cutting off its nose to spite its face. Streaming by AM and FM stations would likely be far and away the largest source of performance royalties for the artists and record companies that SoundExchange claims to represent, but only if a deal can be reached on rates far below those set by the CRB, which are way above the level where anyone can stream profitably.