Net radio broadcasters have reached a deal with SoundExchange, the group that collects royalty fees for record labels, that will put a $50,000 cap on royalties for individual broadcasters. The cap will apply to broadcasters as a whole. Individual channels will be subject to a $500 minimum, but services like Live365 and Last.fm that broadcast thousands of channels will only pay up to the $50,000 ceiling.
"We are encouraged by todayÄôs announcement," said Jake Ward, a spokesperson for the SaveNetRadio coalition in a press release (PDF). "This agreement is a clear sign of progress in the ongoing negotiations between webcasters and SoundExchange and a very good first step toward a viable solution, but it is just the beginning. As the negotiation of recording royalty rates and terms continues, SaveNetRadio urges everyone involved to work in good faith toward a resolution." Ward's remarks indicate that this agreement is still not ideal for net radio companies.
Webcasters will also agree to provide SoundExchange with an annual record of every song played and the Digital Music Association, which represents a large number of web broadcasters, will work with SoundExchange to look into the practice of "streamripping," in which listeners record songs from the radio stream. Discussions over per song royalty rates on ongoing.