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Music Industry Offers Unappetizing Royalty to Webcasters

The music industry considerately granted small webcasters the option of paying "below market" royalty rates for songs they play — by keeping rates the same under the 2002 Small Webcaster Settlement Act, reports ZDNet.

Webcasters considered "small" will pay 10 percent of all gross revenue up to $250,000 and 12 percent over that amount. The deal holds until 2010.

The net result of this proposal is that small Webcasters would be guaranteed no increase in royalty payments for 13 years, from 1998 to 2010," said SoundExchange general counsel Michael Huppe in a statement.
However, a coalition of webcasters, listeners and artists called SaveNetRadio thinks the new rules will ultimately stunt growth as companies strive to keep revenue below government-set caps.

New radio is currently still battling rules by the U.S. Copyright Royalty Board that forces smaller webcasters to pay between 300 and 1,200 percent more in royalties, further crippling the fledgling industry.

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