SoundExchange Floats Preliminary, Small Webcaster Deal

Ahead of a February 15th deadline, SoundExchange is now floating a deal to small webcasters.

The proposed points, leaked to Digital Music News, are designed to replace push-forward provisions of the Small Webcaster Settlement Act (SWSA).

SoundExchange pointed to a number of enhancements within the newer provision.  Instead of a push-forward deal term of 2006-2010, the updated proposal covers 2006-2015, though both include retroactive payments.  More importantly, the revision includes a more tiered approach designed to include the smallest broadcasters.

That includes a provision for “microcasters,” a group that would probably be priced out of previous agreements.  The proposal offers to charge a revised fee, without the burden of requiring detailed traffic logs.  “The goal here is to make the SX distributions more efficient by avoiding the considerable cost of processing logs for each of potentially thousands of microcasters,” the letter stated.

Specifically, microcasters are defined as earning less than $5,000 gross revenue per year, or $10,000 in expenses.  ATH (average tuning hour) thresholds would be 18,067 ATH/year, and the annual minimum fee would be $500 plus a $100 fee for the reporting waiver.

Stepping up from the microcaster, other small webcasters would be required to submit logs, and keep archives for a total of 4 years.  That includes those making less than $50,000 annually in revenues, a group that would be required to pay a minumum fee of $2,000 alongside the detailed logs.  “We’re including a new reporting requirement for Small Webcasters to keep server logs for at least four (4) years as part of increasing compliance with the statutory license,” the SoundExchange letter stated.

But the rules change if an acquisition emerges.  Specifically, a small webcasters would be required to “true up” its rates to that of the larger acquirer, and some questionable handcuffs apply.  “Further, the small webcaster taking this deal may not sell to any entity that is or will participate in a proceeding to set rates and terms for webcasting,” the letter noted.