The Webcaster Settlement Act has been passed by the US House of Representatives, allowing Internet radio stations the ability to negotiate with the music industry on royalty rates. Will this move actually silence the death knells for the industry?

In March 2007 the Copyright Royalty Board dramatically increased the royalty rates that Internet radio stations must pay record labels and artists, sending the industry into a tailspin. The increased tariff has shut down many Internet streams and shuttered sites such as the online mix tape tool MuxTape.

The bill, which would allow Webcasters to negotiate directly with the music industry, has passed the House or Representatives and must now clear the Senate. However this is just the first step in reversing the damage done to Internet radio.

Internet radio broadcasters would still need to iron out a deal with SoundExchange, a nonprofit component of the RIAA that collects royalties for artists from satellite and Internet radio stations. Both sides are eagerly awaiting the bill, which would allow them to negotiate agreements directly with SoundExchange.

The bill passed unanimously in the House, a good omen for the bill, which had drawn the ire of traditional radio. However, the National Association of Broadcasters dropped its opposition to the bill at the last minute.

One of the most vocal supporters of the bill from the Web industry is Tim Westergren, the founder of online streaming radio service Pandora. He has lobbied very strongly in Congress for the bill, which he says is a matter of life or death for sites like his.

Hopefully the newfound momentum in the House will help the bill to clear the Senate. From there the industry can hopefully come to an agreement before more of such services are shuttered for good, bankrupted by the increase in royalties and unable to come to terms with artists.

Related:

Entry was posted on Tuesday, September 30th, 2008 at 8:24 am under Uncategorized.

Read more entries by Dave Jeyes.
Stumble It!