SMALL WEBCASTERS, RIAA FORMALLY UNVEIL ROYALTY ACCORD
In settlement both sides admit bears little relevance to market-driven royalty rates, small commercial Webcasters and copyright owners last Fri. formally ended their dispute over fees for certain digital performances and ephemeral copies of sound recordings. In document filed with U.S. Copyright Office, RIAA’s SoundExchange, which collects royalties accruing under certain statutory licenses, and Voice of Webcasters (VOW), coalition of small Webcasters, said they had reached agreement under Small Webcaster Settlement Act (SWSA) signed Dec. 4.
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However, they said rates “truly are a compromise motivated by extraordinary and unique circumstances” that shouldn’t be given precedential weight. SWSA expressly prohibits agreements made under its terms from having precedent.
Under accord, which SWSA required to be negotiated by Dec. 15, eligible small Webcasters must pay 8% of their gross revenue or 5% of their expenses during the period Oct. 28, 1998-Dec. 31, 2002, whichever is greater, in 3 installments, last due Oct. 31, 2003. For 2003 and 2004, small Webcasters will owe 10% of their first $250,000 in gross revenue and 12% of any gross revenue above $250,000 during applicable year, or 7% of expenses during year, whichever is greater. Payments for 2002-2004 must be paid on or before last day of next succeeding month.
Webcasters may opt instead to pay minimum fees for relevant periods: (1) $500 for period Oct. 1998 to Dec. 1998. (2) $2,000 per year for eligible nonsubscription transmissions made in any part of calendar years 1999 through 2002. (3) $2,000 per year in 2003 and 2004 for small Webcasters with gross revenue during preceding year of not more than $50,000 and expected gross revenue during applicable year of not more than $50,000. (4) $5,000 per year in 2003-2004 for those Webcasters whose gross revenue exceeded or was expected to exceed $50,000 in applicable year. Agreement also requires Webcasters to keep records of their use of copyrighted materials, and to cooperate in SWSA- mandated report to Congress.
SoundExchange announced joint submission Mon., saying it was “technical formality” required by SWSA, and pointing out that its terms and rates mirrored provisions of original small Webcasters legislation passed by House and, in modified form, by Senate. SoundExchange Exec. Dir. John Simson said he was pleased “that artists and record companies have worked hand in hand with the Internet radio industry to move forward with the legislation.”
VOW members are pleased they now have ability to pay based on percentage of revenue rather than per performance, Webcasting source said. On other hand, source said, they would have preferred lower rates and for deal to encompass more Webcasters.
SoundExchange-VOW pact doesn’t resolve all outstanding rate negotiations, Webcasting source said. For example, SWSA provides for negotiations with noncommercial Webcasters to go on until June at latest, with fees on hold until then. Talks with large companies, very small Webcasters and others are continuing, source said. And if broadcasters -- which have challenged in federal court Copyright Office’s determination that they must pay royalties for streaming their programs -- lost their appeal and declined to pay royalties set by Copyright Arbitration Royalty Panel, source said, they also could wind up in negotiations.