Streaming progress for Web royalty rates
House OKs compromise
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Bill, introduced by House Judiciary Committee chairman F. James Sensenbrenner (R-Wis.), allows small online broadcasters to pay royalties on the songs they play as a percentage of the revenue they take in, rather than at the flat rate of 0.07¢ per song streamed set under earlier rules.
The Senate is expected to consider a version of the bill, spearheaded by Sen. Patrick Leahy (D-Vt.) this week.
Labels and Webcasters cut a deal over the weekend (Daily Variety, Oct. 7) after several months of pitched debate. Webcasters had argued that the flat-rate system would knock small players out of the game before they had a chance to establish themselves.
Best experience
"We both want fans to have the best musical experience possible, and this legislation helps us move forward together toward that goal," the Recording Industry Assn. of America and Voice of the Webcasters, a trade org repping a dozen small players, said in a joint statement.
Under the two-year deal, Webcasters who earn less than $500,000 in 2003 and $1.25 million in 2004 are eligible to pay a minimum fee plus a percentage of revenues. The exact rates vary based on how much the Netcos take in.
Webcasters with past revenues of under $1 million also will be allowed to pay on a percentage basis for back-royalties, dating to the beginning of the licensing scheme in 1998's Digital Millennium Copyright Act. The companies had complained that proposed lump payments for back-royalties would have put them out of business.
