Webcasters Reject Latest SoundExchange Offer

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SoundExchange's latest offer to small business webcasters would force economic limitations and restrict audience growth, limit music choices to RIAA-member labels and larger independents.

These are bankruptcy-level rates, which were set in the fatally flawed Copyright Royalty Board (CRB) ruling in March. Those CRB rates were condemned by webcasters, the press, and members of Congress and deemed as wildly out of line and detrimental to all parties concerned -- including the RIAA

Thousands of webcasters stand firm by rejecting the most recent Copyright Royalty Rate proposal made by SoundExchange. The latest take it or leave it "offer" made by SoundExchange on behalf of the recording industry has done nothing to further negotiations with webcasters, and a mere 24 small and hobbiest webcasters have felt they had no choice but to give in to big record labels demands.

"The latest proposal made by SoundExchange is extremely disappointing, at a time where we need real progress, not hollow tricks," SaveNetRadio spokesperson Jake Ward said. "While the clock continues to tick for webcasters, SoundExchange continues to play games with their good faith. The resounding rejection of this offer should serve as a reminder to SoundExchange, and to Congress, that the webcasting community is intent on a lasting and fair resolution to this issue, and willing to fight for it.

"We, the undersigned have made it very clear to the Sound Exchange exactly why this latest offer is unrealistic and unacceptable. Its terms are not viable for webcasters seeking to run sustainable, profitable businesses."

One such term is the newly added ATH (Aggregate Tuning Hour) cap which immediately makes many mid-level webcasters ineligible for the recently presented agreement. Internet radio stations with more than 8000 average listeners do not qualify for the offer, stations currently under the ATH cap will have 6 months to transition to the CRB rate. "This is effectively putting them out of business or forcing them to scale back their audience," says Rusty Hodge, General Manager of SomaFM.com.

"This deal is not feasible for anyone who wants to grow and create a sustainable business," says Hodge.

Val Starr of GotRadio.com, says "In addition to the $1.25 million revenue cap, which limits growth and puts in place a dangerously low hard ceiling for revenue generation. The Small Business Administration revenue cap for over-the-air broadcasters to be considered a small business is $6.5 million -- this would seem a fair cap, with precedent."

Hodge says it is "even worse for independent broadcasters, since the offer only covers approximately 20,000 copyright holders that are registered SoundExchange members. That is less than 1/10th the number of different artists played by internet radio stations in the US last year."

Under the SoundExchange offer, in order to broadcast artists not on that limited roster, webcasters would have to pay at the March 2007 CRB rate. "These are bankruptcy-level rates, which were set in the fatally flawed Copyright Royalty Board (CRB) ruling in March. Those CRB rates were condemned by webcasters, the press, and members of Congress and deemed as wildly out of line and detrimental to all parties concerned -- including the RIAA," according to Hodge.

"Webcasters have asked for a reasonable, long term solution, not one that is subject to increase at the whim of the record industry every five years. 2010 is little more than 2 years away, and it would be difficult for any business owner to accurately forecast profits and build a successful business model with a huge expense variable looming in the future," says Starr.

Although many of the webcasters listed below are currently involved in direct negotiations with Sound Exchange, the process remains exceedingly slow and increasingly unpromising. In the continuing absence of a genuine offer that would allow internet radio to continue to be the vital medium for new music discovery we implore our listeners and fans of internet radio to continue to urge your legislative representatives to pass the Internet Radio Equality Act (HR2060, S.1353)."

For information on how you can contact your representative, please visit http://www.savenetradio.org.

Signed:

Jeff Bachmeier, .977
Val Starr, GotRadio.com, 100hitz.com
Rusty Hodge, SomaFM.com
Rick White, BigR Radio. 1faith.fm
Donnie Mowbray, 181.fm
Kurt Hanson, AccuRadio
Dave Landis, Ultimate 80's
Bill Goldsmith, Radio Paradise
Ted Leibowitz, BagelRadio
Sal Amato, Dot1media
Brandon Casci, Loud City
Jim & Wanda Atkinson, 3WK
Ari Shopat, Digitally Imported / Sky FM
Mike Roe, Radio IO

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Rusty Hodge
SomaFM
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