Internet Radio Rolls On

Sharply higher royalty rates for Web radio stations went into effect over the weekend, but negotiations are continuing between station owners and the recording industry to reach agreements that could greatly soften the impact of the new rates.
Thanks to these efforts and mounting pressure from congressional lawmakers, the Internet radio industry no longer appears likely to face the premature death that supporters had warned was imminent under the new rates.
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A Reprieve for Internet Radio?

SoundExchange, the organization that collects royalties for copyright owners in the music business, last week extended a compromise offer aimed at allaying the fears that sites like Pandora and Live 365, which offer multiple streams, would be forced out of business when the new fees go into effect later this month.
According to regulations set by the Copyright Board, these sites, and others like Rhapsody and Radio@AOL, would have to pay a fee of $500 per station or channel per year, regardless of the number of stations. Live365 has thousands of stations; Rhapsody claims to have offered 400,000 in the last year alone. The combined fees would have leveled prohibitive costs against the stations, forcing them out of business.
SoundExchange's proffered solution is to offer a price cap. According to the press release issued last Friday, June 29, the organization "proposed capping such advance payments at $2,500 per service."
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Reconsidering iTunes

As the world's largest record label, Universal has the future of the music industry to think about. It's a future that could very well be dominated by a business model other than the pay-per-download version that Apple popularized. Sources close to Universal say the company has moved to what's known as an "at will" arrangement that enables it to strike exclusive distribution deals with other digital music providers for individual artists or tracks, though it will continue to sell music through iTunes.
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