Webcasters get reprieve on new rates

It seems Internet radio has gotten a midnight reprieve. Less than two weeks before new, higher royalty rates were set to go into effect on May 15, the Copyright Royalty Board announced it would push back the start day for the new rates until July 15. Many webcasters have complained the new rates are so high they will be forced off the air.

FMC applauds the move because it will give webcasters a chance to negotiate a lower royalty rate that will allow them to remain on the air, while paying artists a fair royalty rate. Webcasters are an important outlet for genres of music and artists that don't normally get played on radio. The CRB should recognize the current one-size fits all royalty system doesn't work.

The reprieve also gives time for a webcasting bill authored by Rep. Jay Inslee, D-Wash., to wend its way through Congress. The bill would do away with the flat rate royalty system adopted by the CRB in March, and return to the old system of a percentage of profits model. The rate would be 7.5 percent of profits -- the same rate paid by satellite broadcasters.

Incidentally, the CRB's announcement came the same day a bunch of webcasters were pounding the pavement on Capitol Hill in support of Inslee's bill. Hmmm. I wonder if that was a coincidence? Kurt Hanson over at RAIN reports a "high percentage" of the house members contacted gave verbal commitments to signing on to the bill as co-sponsors. The next couple of months should be very interesting...