Webcasters Get Royalties Extension

By | October 21, 2002 at 12:00 AM

Smaller Internet music broadcasters are getting an extension on copyright royalty payments that would have been due Sunday, which means they can avoid shutting down.

The webcasters will still have to pay up to $2,500 each in fees by Monday. But that is far less than the tens of thousands of dollars that many of them would have owed.

The extension, granted by the recording industry and performance artists Friday, came a day after the Senate recessed for the elections without approving copyright rate revisions negotiated between webcasters and the copyright holders.

The changes, unanimously approved by the House earlier this month, would have significantly reduced payment obligations for smaller webcasters, who complained that the higher rates could have put them out of business.

“From the beginning, we have wanted to work with webcasters, and this temporary payment policy is another example of our commitment to the webcasting industry,” said John L. Simson, executive director of SoundExchange, the organization collecting payments on behalf of the music industry and the artists.

Only webcasters that would have qualified for reduced payments under the webcasting bill will be eligible for the extension. Simson’s statement, issued late Friday, said the extension will be in effect until Congress could act on the bill.

The statement does not say what would happen if Congress never passes the bill, or if the president does not sign it, although the statement refers to “this Congress” – which adjourns at year’s end. A message left with Simson after business hours was not immediately returned.

Traditional radio broadcasters have been exempt from paying royalties to recording labels and performance artists on the grounds that the broadcasts had promotional value. In 1998, Congress passed a copyright law requiring such royalties from webcasters.

An arbitration panel proposed rates of $1.40 per song heard by 1,000 listeners, and the U.S. Copyright Office halved them in June and set the Sunday deadline for payments.

Under the settlement awaiting legislative approval, smaller webcasters could calculate payments based on how much they earn or spend. For a small webcaster like Ultimate-80s, that meant owing $7,700 instead of $24,000.

Even the reduced rates are too high for some. Internet Radio Hawaii briefly went offline, although it has come back after listeners donated more than $2,000.

Hundreds of other stations had previously shut down.

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