Challenges to New Web Royalty Rates

The Copyright Royalty Board (CRB) announced their final determination on May 1 to implement their earlier announced increases in royalty fees which web casters must pay to artists and record labels for streaming music. This comes after Reps. Jay Inslee (D-WA) and Donald Manzullo (R-IL) introduced legislation to nullify the CRB’s ruling.

After hearing from many about the ruling’s effect on small webcasters, Soundexchange, the royalty distribution collective, announced an offer to extend the lower royalty rates for another three years. Under this plan, which was in response to Congressional inquiries, small webcasters would pay 10 percent of gross revenue, up to $250,000, and 12 percent for revenue exceeding that amount. However, two web radio companies that have been lobbying Congress to get the new fees overturned would be excluded because their revenues exceeded the amount included in Soundexchange’s offer. The legislative effort is expected to continue due to concerns about Soundexchange’s offer.

A court challenge is also in progress. The Digital Media Association, National Public Radio, and other webcasters filed a motion in June for a stay of the new royalty fees pending appeal with the U.S. District Court of Appeals.

First Published:
June 30, 2007