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New Royalty Rates Secure Web Radio Future

Gordon Kelly


New Royalty Rates Secure Web Radio Future

Could Pandora soon be back in the UK?

That is a distinct possibility following the long awaited news that online streaming radio companies have at long last been able to agree royalty rates with record labels and performance rights holders.

The new fixed figure is 25 per cent of their revenues in royalties and a more significant annual minimum royalty. Harsh but not compared to fears it could have topped 70 per cent or even 100 per cent if it was ruled streaming radio companies had no entitlement at all, something which would have put the likes of Last.fm and Pandora out of business.

"More than two years in the making, this is an agreement we're proud of because it shows that both sides can address the business concerns of the webcasters while giving artists and copyright holders the potential to share in the revenue growth of webcasters," said John Simson, Executive Director of non-profit US rights body SoundExchange. "It's a creative, groundbreaking approach that we wanted to try, and we hope it will work well for everyone involved - the artists, labels and eligible webcasters."

"I have been eagerly anticipating the day when I could finally write these words: the royalty crisis is over!" declared Pandora founder Rim Westergren. "Webcasters, artists, and record labels have reached a resolution to the calamitous Internet radio royalty ruling of 2007. Pandora is finally on safe ground with a long-term agreement for survivable royalty rates. This ensures that Pandora will continue streaming music for many years to come!"

This agreement is now nailed down until 2015 which means a new degree of certainty for online broadcasters and a potential spur to new organisations looking to enter the market.

Now before we get too hopeful back in Blighty, these agreements only apply to the US. That said, a precedent has now been set and it must surely pave the way for similar common sense to now be applied within the European Union. And sometime before 2015 please...



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July 9, 2009, 5:31 pm

Gordon, the annual minimum royalty rate is apparently $25,000.

Also, there seems to be a question of whether radio stations who only play music not covered by the RIAA (as in, music for which they have made deals with the copyright holders directly, not licensed from the four big labels) will also have to pay this charge.

All this worries me greatly, to be honest. It seems that every avenue for people to sample music freely is being shut down or restricted out of greed. So if anyone has any links to music that is free and legally available online, directly from the artists, I would be most interested.

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