Copyright Board Agrees to Reconsider Web Music Fees (Update2)
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www.bloomberg.com/apps/n ··· udwJ0oMoBy Andy Fixmer
March 20 (Bloomberg) -- The Library of Congress Copyright Royalty Board agreed to reconsider a decision to increase royalties for music played on the Internet after radio broadcasters complained the new prices were too high.
The judges agreed to listen to arguments submitted by National Public Radio, commercial radio broadcasters and college stations, the board said today. NPR spokeswoman Andi Sporkin provided a copy of board's order in an e-mail.
The higher royalties would force NPR stations to cease offering Web simulcasts, Sporkin said. SomaFM, owner of 11 Web music channels, said its 2006 fees would multiply 27 times under the new rates to more than $600,000. Next year's would exceed $1 million, the San Francisco-based company said in a statement on its Web site. The music industry defends the higher rates.
``We think the ruling is fair and reasoned,'' said Michael Huppe, general counsel for Sound Exchange, the group representing artists and record labels. ``Nobody got everything they asked for. The judges did an excellent job objectively evaluating the evidence and the witnesses and issued a very fair opinion.''
Broadcasters paid below-market rates for music from 1998 to 2006, and the higher fees translate to an estimated 8 percent annual increase over that time, Huppe said.
Royalty Pain
On March 2, the royalty board decided Internet radio outlets must pay a fee for each song they play, a change from a previous formula that called for payment based on a percentage of revenue. In addition, each Internet station would pay an annual fee of $500 under the ruling now being reconsidered.
Record companies ``don't want competition from independent Webcasters'' because it threatens the labels' business models, SomaFM said on its Web site.
The largest U.S. radio broadcaster, San Antonio-based Clear Channel Communications Inc., also opposed the new rules, the Associated Press has reported.
A call to Clear Channel spokeswoman Lisa Dollinger wasn't immediately returned.
Interested parties have until April 2 to submit written arguments, the board said today.