Tuesday, October 08, 2002

Smaller Webcasters may get song reprieve

The Associated Press

        Smaller Internet music broadcasters would owe thousands of dollars less in copyright royalty payments under rate revisions the U.S. House unanimously approved Monday.

        If the revisions become law, the Webcasters would get a few more years of reprieve from per-song, per-listener payments that they complain could put them out of business when royalties become due Oct. 20.

        The revisions in the House bill were based on a last-minute deal between the Webcasters and the recording industry Sunday after almost a week of intense negotiations.

        The deal, which still needs Senate and presidential approval, lets smaller Webcasters like Ultimate-80s calculate rates based on the size of their cash flow.

        Larger and medium-sized Webcasters would still have to pay a fee based on songs played and audience size.

        The smaller Webcasters say they were generating little revenue to begin with and would need larger audiences to attract more advertising dollars. But as they built audiences under the old formula, they say, royalty payments would proportionally increase, making their businesses impossible to build.

        The Recording Industry Association of America called the new rates the product of a compromise that should ultimately benefit fans.

        Ann Chaitovitz, director of sound recordings for the American Federation of Television & Radio Artists, also praised the deal, even it means smaller fees for artists.

        Traditional radio broadcasters have been exempt from paying royalties to recording labels and performance artists on grounds the broadcasts had promotional value.

        The recording labels were able to win royalty payments in a copyright law passed in 1998, when many of today's Webcasters weren't in business.


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