May 22, 2007 | By Derek Slater

Music Webcasting Still in Danger, After Small Stations Get Temporary Reprieve

Responding to Congressional pressure, the major label-backed licensing authority SoundExchange has offered small webcasters a temporary reprieve from the Copyright Royalty Board's outrageous royalty rate increase. This is a step in the right direction, but it still doesn't solve any of the underlying problems with the current licensing system. Music webcasting's future still hangs in the balance.

The offer announced today would essentially extend the much more reasonable statutory licensing terms that small webcasters have relied on for the last five years. But commercial services like Pandora and Live365 are still in deep trouble, as are small webcasters that may want to expand their business over time. And when SoundExchange's offer expires in 2010, small webcasters may once again be threatened with extinction.

The Internet Radio Equality Act would help sustain music webcasting and fix the statutory licensing process on which most nonsubscription, noninteractive music webcasters rely. For more on this bill and SoundExchange's offer, check out as well as Kurt Hanson's Radio And Internet Newsletter.

Update: David Oxenford, an attorney representing certain small webcasters, makes some important criticisms of the offer here.

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