SoundExchange Offers Cap That May Help Pandora, Last.FM and Others
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Digital Media Association Rejects SoundExchange's "Stay Of Execution"

New regulations to go into effect on July 15th require each webcasters to pay a $500 minimum advance on royalties "per station or channel".  Do the math and you'll see that a service like Pandora or Last.FM who create thousands of custom streams would easily be put out of business.  Yesterday in a press release SoundExchange offered a cap of $2500 against future royalties no matter how many streams a broadcaster offered.

But in a scathing response, Jonathan Potter, Executive Director of the Digital Media Association said, "DiMA would agree to a $2,500 per-service cap for the entire term of the CRB ruling (through 2010), but not the partial-offer presented to us in writing, which would terminate in 2008. Any offer that doesn't cover the full term is simply a stay of execution for Internet radio."

"The looming 2009 billion-dollar threat is destabilizing and inhibits investment and growth. DiMA, like thousands of artists and millions of consumers, wants a solution that promotes long-term industry growth," he continued. "A billion-dollar "minimum fee" is equally absurd in 2006, 2007, 2008, 2009 or 2010.  It should be eliminated - period. DiMA is disappointed to have to issue this statement; we would prefer to resume negotiating important issues directly with our counterparts rather than through press releases."

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