• Associated Press, Friday, August 24, 2007 10:46 AM

SoundExchange, the music royalty board set up by the federal government, will limit the fees imposed on Web radio stations that offer more than 100 channels to consumers to $50K per year. Representatives from radio companies agreed this was a positive first step in repairing relations with the royalty overseer. SoundExchange sets the royalty rates that terrestrial and Internet radio companies must pay artists and labels for broadcasting their music.

Following the announcement of a substantial royalty hike and a fee of $500 per station or channel, Webcasters said the new rates were unfair as compared to terrestrial radio. A consortium of major Web radio firms brought the matter before a copyright judge and lost, although since the ruling, SoundExchange has made certain concessions, such as a royalty discount to smaller Webcasters earning less than $1.25 million in annual revenue.

Pandora Media founder Tim Westergren described the additional $500 fee per station as "kind of absurd." His company is a large Webcaster that streams hundreds of customizable music channels. "But the real meat of this," he added, "is the (royalty) rate, which has not been figured out yet." SoundExchange, in exchange for the concession, wants more accurate reporting of what songs the stations stream in addition to a collective effort to prevent users from illegally downloading streaming radio. The royalty collective represents some 2,000 recording artists and 3,500 record labels, including all the majors.

Read the whole story at Associated Press »