SoundExchange Offers Cap That May Help Pandora, Last.FM and Others
New Music Business Week In Review

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."