SoundExchange Defends Internet Radio Royalty Rates

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SoundExchange recently defended a revised streaming radio royalty rate structure as passed by the Copyright Royalty Board (CRB), arguing that the ruling was “fair”.

In a statement issued Thursday, SoundExchange executive director John Simson called upon broadcasters to consider the revenue needs of artists.  “The music created by artists is the main reason why people listen to internet radio, and those artists should be fairly compensated for the value they bring to each webcaster’s business,” Simson said.  “Yet, the webcasters refuse to acknowledge this common sense fact.”  The declaration follows a swell of protest from major streaming radio groups following the CRB decision, and a subsequent decision by the Board to rehear arguments in the matter.  The protest group, which includes heavy-hitters like National Public Radio (NPR), Clear Channel, and AOL, argued that the newly-issued royalty structure would impose needless expenses upon broadcasters, and cause a significant number of small and midsize companies to exit.

Simson acknowledged those assertions, though he also pointed to the myriad of revenue possibilities open to enterprising broadcasters.  “Webcasters have a number of opportunities to maximize revenue with a captive audience attracted by music created by artists through banner ads, pop-ups, video pre-rolls, audio commercials and other avenues of revenue generation,” he noted.  That argument could affect refreshed CRB deliberations, though both parties are likely to hammer a recording royalty rate structure that offers more balance between the revenue needs of artists and the total budgets of internet broadcasters.  The recently-passed schedule, passed March 2nd, replaced royalty calculations based on a percentage of total revenues with a per-play penny rate.  The CRB offered to rehear arguments earlier this week