Internet radio stations, which were facing the dire prospect of having to start paying exorbitant royalty fees or shut down, were given a temporary reprieve while legal matters and policy issues are still being worked out, according to Wired magazine’s “Listening Post” blog.
At Thursday’s Congressional hearing about the new rates for online radio that would essentially destroy it (as readers of this blog already know), SoundExchange, which was scheduled to receive the new royalty payments on Monday morning (since the enforcement date falls on a Sunday), made a startling statement.
The SoundExchange executive [Jon Simson, executive director] promised — in front of Congress — that SoundExchange will not enforce the new royalty rates. Webcasters will stay online, as new rates are hammered out.
Pandora founder Tim Westergren expressed relief that Pandora wouldn’t have to shut down on Sunday in response to the new rates. He said, “It was getting pretty close. I always had underlying optimism that sanity was going to prevail, but I was beginning to wonder.”
He said everyone who called their Congress person about this should feel that they had an effect on the process: “This is a direct result of lobbying pressure, so if anyone thinks their call didn’t matter, it did. That’s why this is happening.” The flyer DiMA distributed to Congress today probably helped a bit too, but overall, it appears Congress intervened due to pressure from web radio listeners.
Funnily enough, Westergren told me this mere hours after a representative of SoundExchange said
that the new rates are “etched in stone.” Evidently not.
Another source — close to the situation although not inside today’s closed-door hearing — confirmed the following: Pandora was there; “progress was made”; the minimum fees are indeed off the table; and SoundExchange and the webcasters that were part of the Copyright Royalty Board hearings are going to have another chat about the rates.
However, the source said the big question right now is whether webcasters not part of the CRB hearing might still have to pay the rates set by the board, minus the minimum fees.
Basically, this news qualifies as a reprieve, but internet radio won’t be truly saved until negotiations result in a workable royalty rate.