• The Hollywood Reporter, Friday, July 13, 2007 11:15 AM

Mark Thursday July 12th as the day the music died. A federal appeals court rejected Webcaster's requests to postpone the implementation of new royalty rates for music broadcast over the Web. That means Monday, July 16, will stand as the day Webcasters will have to pay copyright holders a new, higher royalty payment for digitally delivered music.

"This is a major victory for recording artists and record labels whose hard work and creativity provides the music around which the Internet radio business is built," SoundExchange executive director John Simson said. SoundExchange is the federal organization created to set and distribute royalty rates in 1995, following the Digital Performance Right in Sound Recording Act. Royalties are split 50-50 between the copyright holder and either the label, the artist or sometimes other entities.

Many Webcasters believe Web radio will die now. Says Digital Media Association executive director Jonathan Potter after the court's decision: "The result will certainly be fewer outlets for independent music, less diversity on the Internet airwaves, and far fewer listening choices for consumers."

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