SaveNetRadio rejects SoundExchange's offer to spare small webcasters

by Eliot Van Buskirk, Wired News rejected yesterday's offer from SoundExchange to allow small webcasters to pay lower rates. The offer would charge them "10% of all gross revenue up to $250,000, and 12% for all gross revenue above that amount," as long as they have few enough listeners. One problem with the proposal is that SoundExchange doesn't put a number on how few users a station would have to have in order to qualify as a small webcaster.

SaveNetRadio, which represents webcasters large and small, called SoundExchange out on what it sees as a bogus offer that would effectively bind the feet of small webcasters:

"The proposal made by SoundExchange today would throw 'large webcasters' under the bus and end any 'small' webcaster’s hopes of one day becoming big,' SaveNetRadio spokesperson Jake Ward said. “Under government-set revenue caps, webcasters will invest less, innovate less and promote less. Under this proposal, Internet radio would become a lousy long-term business, unable to compete effectively against big broadcast and big satellite radio – artists, webcasters, and listeners be damned.'

"'Labeling webcasters small or large is a distinction without a difference,' continued Ward. 'Two of the most prominent webcasters, and Live365 are models of industry success but would be bankrupted by the CRB and by the SoundExchange proposals. Pandora employs 100 people in an enterprise zone in Oakland, California, but its popularity would put it out of business. Similarly, Live365, an aggregate webcaster that provides a platform for more than 10,000 individual webcasters, has a staff of fewer than 40. Though clearly small as a business, Live365's enormous importance and scope among webcasters would force them to shut down."

These objections ring true, and so the fight to save internet radio continues.

SaveNetRadio suggests that those interested in saving webcasting contact their Congressional representatives in the hopes that they will pass the Internet Radio Equality Act (S. 1353 in the Senate, H.R. 2060 in the House), which would allow webcasters to pay the same royalties currently enjoyed by satellite radio: 7.5% of revenue.

Of course, webcasting is way cheaper than satellite broadcasting, so revenues -- and thus royalty payments -- can be lower. But the fact that the web is far more efficient than satellites for distributing music isn't webcasters' fault.

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