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Recording Industry to Webcasters: Don't Get Too Excited

The copyright negotiations between Webcasters and the recording industry may continue under a bill approved by Congress over the weekend.

But the trouble for Webcasters may be far from over.

While Webcasters responded to the extension from Congress with renewed hopes for a settlement, today, recording industry officials expressed a "note of caution" regarding negotiations.

"We are hopeful, but we've been close at other times during the past 18 months," John Simson, executive director of SoundExchange, which represents recording labels and artists, said in a statement.

Internet radio outfits say the current performance royalty fees they must pay to play a song will put them out of business. Those rates were doubled by the Copyright Royalty Board last year.

Webcasters hope that SoundExchange will lower the rates and Rep. Howard Berman (D-CA), who is considered to be sympathetic to the labels, is trying to broker a deal between the two sides.

"Certainly, Congressman Howard Berman's role as facilitator has helped tremendously in moving the ball forward," Simson said. "My hope is that we can quickly get back to the table and capitalize on the momentum."

The talks are expected to continue once President Bush signs the legislation that extends the negotiations.

Tim Westergren, founder of pandora.com, one of the largest Webcasters, said he is "definitely optimistic" about the possibilities for a resolution.

By Peter Whoriskey  |  October 1, 2008; 12:11 PM ET
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Itunes could be shut down because of the change in royalty rates. This is a outrage. We will have no place to find music.

Posted by: LDS | October 1, 2008 2:12 PM

the recording industry's greed is sad.

Posted by: Harry | October 1, 2008 4:35 PM

"Itunes could be shut down because of the change in royalty rates. This is a outrage. We will have no place to find music."

Buy a CD?

Posted by: Sage | October 2, 2008 8:33 AM

I am sorry, but what has been a mystery to me and continues to be so turns on why Congress has not enacted into law the Internet Radio Equality Act, which addresses the inequality that was written into the DMCA of 1998.

I remain convinced that there is no rational basis for discriminating against Internet radio. There is no reasonable cause that justifies granting satellite radio the 801(b)1 standard while imposing on Internet radio the "willing buyer, willing seller" standard.

It is sad that Congress did not seek to resolve this aspect of copyright law.

I am afraid that, rather than resolving the underlying problems that gave rise to the CRB's decision over a year ago, Congress simply extended the period during which negotiations may continue, while holding in abeyance the rates imposed by the CRB in respect of Internet radio.

Posted by: Charlie | October 2, 2008 2:23 PM

I apologize for the double post, however, even if SoundExchange negotiates a fair settlement with Internet radio before Februrary, without codification of fair and equitable standards in the law with respect to Internet radio, it is not unlikely that SoundExchange and the CRB in future will not attempt again to extract exorbitant rates when such an agreement expires.

I am sorry to write that much of the RIAA and SoundExchange seem rather intent on implementing self-defeating and deleterious policies. Their history speaks volumes.

Posted by: Charlie | October 3, 2008 2:13 PM

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