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Webcasters wake up Monday to an uncertain future

Many Webcasters will wake up facing an uncertain future on Monday, thanks to conflicting messages coming from SoundExchange, the US royalty collection society for sound recordings.

The netcasting industry has been in a state of strife since the 1s oft May when the Copyright Broadcasting Board (CRB) announced new royalty rates for netcasters which amounted to a substantial increase in royalty rates for existing netcasters starting Monday 16 July. The new rates have been the subject of much negotiation between the society tasked with collecting the royalties, SoundExchange, smaller netcasters, who argue that they may go out of business if made to pay the new rates.

Speaking in front of the US Congress on Thursday the executive director of SoundExchange, Jon Simson, said that his organisation would not enforce the new royalty rates and would continue to negotiate with Webcasters concerning the rates.

Yet the failure of SoundExchange to reach a compromise solution with the small netcasters to date and conflicting statements in the media since Friday means that small netcasters are still uncertain about the rates they will be expected to pay on Monday and what measures SoundExchange will use to enforce the new rates.

On Friday, SoundExchange publicly repeated its offer for a $500 minimum per channel fee, with total channel cap of $50,000 per year for broadcasters providing that they give SoundExchange detailed reporting of their playlists and agreed to introduce mechanisms to stop digital recording of radio broadcasts.

While the statement from SoundExchange referred directly to payment requirements for large netcasters, it left open the subject of what rates smaller Webcasters would be subject to. Opponents of the new rates have pointed out that smaller netcasters will be hardest hit by the new rates, while the impact on larger companies such as AOL and Yahoo will be fiarly minimal.

'We do expect commercial webcasters like Yahoo! and AOL to pay the new royalty rates set by the CRB due July 15,' Simson stated on Friday. ''It is essential that recording artists and content owners receive full and fair compensation from the webcasters making use of their creative works.'

It is likely tthat SoundExchange's statements late last week were designed to put further pressure on smaller Webcasters to come to an agreement, however that's unlikely to provide fans of netcasting with much assurance that their favourite services are still going to be available after Monday.

Tags: aol, digital music, DigitalMusic, soundexchange, yahoo