Web radio was about to be dealt a death blow by the implementation of a massive new royalty plan from SoundExchange, which collects music broadcast royalties, and the Copyright Royalty Board. From ace electronic gadget blogger Machinist:
Many Web radio outfits feared closure as their legal fight against staggering new music royalty rates met failure this week. On Thursday, the D.C. Circuit Court of Appeals refused to block the new rates, which are scheduled to go into effect Sunday. But as a result of public outcry -- which, in turn, sparked congressional outcry -- SoundExchange, the recording-industry group that collects royalties, has agreed not to immediately enforce the rates, pending negotiations with webcasters.
I just spoke to Tim Westergren, the founder of Pandora, the hugely popular Internet radio station that allows people to create personalized music channels. I asked Westergren if Pandora will shut down Sunday: "No, we won't," he said.
This is great news for small, independent and non-commercial websites that stream music to listeners. Or maybe not great, but at least, something less than deadly.
Thursday's deal marks a sharp turnaround for SoundExchange, which told Wired News just hours before that the new online radio royalty rates are "etched in stone."
Observers credited lobbying by net radio listeners with helping bring pressure on SoundExchange. "This is a direct result of lobbying pressure, so if anyone thinks their call didn't matter, it did," said Westergren. "That's why this is happening."
The deal opens the door for longer-term solutions, including action from Congress. On Thursday, Rep. Ed Markey (D-Massachusetts) called parties representing record labels and webcasters before the House Committee on Energy and Commerce to try to broker a deal that would allow online radio stations to survive in something similar to their current form, while still paying labels and artists their due.
Machinist credits people power with the victory, too:
The negotiations between SoundExchange and the webcasters now center on these rates -- and they're taking place, Westergren notes, "under the watchful eye of Congress." And that, he says, is the main news today. "The reason this deal is happening is because of congressional pressure, and congressional pressure is happening because of people calling in. Everybody needs to know that. A million people in the last three months have called Congress about this. And Congress has said, Look, if you don't solve this, we will. That's very explicit."