[infoshare] Judges Reject Appeals From Webcasters - Forbes.com
- From: "Luis Guerra" <blindsingle@xxxxxxxxxxx>
- To: "InfoShare" <InfoShare@xxxxxxxxxxxxx>
- Date: Wed, 18 Apr 2007 05:22:33 -0400
Judges Reject Appeals From Webcasters
By SETH SUTEL 04.17.07, 7:47 AM ET
Internet radio broadcasters were dealt a setback Monday when a panel of
copyright judges threw out requests to reconsider a ruling that hiked the
royalties
they must pay to record companies and artists.
A broad group of public and private broadcasters, including radio stations,
small startup companies, National Public Radio and major online sites like
Yahoo
Inc. (nasdaq:
YHOO -
news -
people
) and Time Warner (nyse:
TWX -
news -
people
) Inc.'s AOL, had objected to the new royalties set March 2, saying they
would force a drastic cutback in services that are now enjoyed by some 50
million
people.
In the latest ruling, the Copyright Royalty Board judges denied all motions
for rehearing and also declined to postpone a May 15 deadline by which the
new
royalties will have to be collected.
However, they did grant leniency on one point, allowing the webcasters to
calculate fees by average listening hours, as they had been, as opposed to
the
new system of charging a royalty each time every song is heard by an online
listener. That exemption counts for last year and this year. After that, the
new per-song, per-listener fee structure goes into effect.
Many webcasters say the sharply higher royalty fees will put them out of
business. Talk of the ruling dominated a one-day meeting of Internet radio
broadcasters
being held in Las Vegas alongside the annual conference of the National
Association of Broadcasters, a group representing local radio and TV
stations.
N. Mark Lam, the CEO of Live365 Inc., a privately held company that
aggregates audio streams from thousands of radio stations and other small
webcasters,
said that under the new royalty rules, "there is no industry."
Lam, who joined the venture capital-backed company about two years ago, said
Live365 just barely broke even last year and had about 4.5 million unique
listeners
every month.
Also on Monday, several Internet radio broadcasters announced a campaign to
raise awareness of the issue and encourage listeners to write to their
representatives
in Congress.
Small broadcasters have received relief from Congress in the past,
benefiting from a law passed five years ago that gave them a break on
royalty rates.
The legislation allowed them to pay about 12 percent of their revenues
instead of having to calculate per-song, per-hour rates like larger
companies had
to.
David Oxenford, a lawyer representing several webcasters, said the next step
was likely an appeal to the U.S. Court of Appeals for the District of
Columbia
Circuit, but he noted that process could take at least a year. Meanwhile, he
said, the prospects of successfully getting a court to block the decision
of the royalty board judges is slim.
SoundExchange, a nonprofit group that collects the online royalties from
webcasters and distributes them to record labels and artists, hailed the
ruling
in a statement and said it looked forward to working with Internet radio
companies in order to ensure that the industry succeeds.
Jonathan Potter, the head of the Digital Media Association, which represents
several large webcasters including Yahoo, AOL and Microsoft Corp. (nasdaq:
MSFT -
news -
people
)'s MSN network, said his group was not currently in talks with
SoundExchange but may be soon. He said his group and other webcasters would
be turning to
Congress, where he said he sees "a lot of legislative support."
The royalties in question only cover digital transmissions of music, and
don't apply to terrestrial radio stations, as traditional radio play is seen
as
a benefit for record labels by promoting sales of recorded music. Both
digital broadcasters and regular radio stations pay a separate royalty to
the publishers
and composers of music.
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