Internet radio will live to see another day

Chris Caceres · July 7, 2009 · Short URL: https://vator.tv/n/942

"Pureplay" agreement between webcasters and record labels will experiment with revenue sharing

 Just the other day I was hanging out with some friends, reminiscing on the music of Michael Jackson.  Outdoors and without access to my record/digital music collection, I decided to load up Pandora on my iPhone and turn on some MJ radio.  Yet the future of Online radio was under question.  Today there’s a light at the end of the once dark tunnel.   

Online radio stations have just sighed a breath of relief as an agreement between them and radio stations has taken place.

A new term titled, “pureplay” has been agreed upon under the Webcaster Settlement Act of 2009.  This agreement gives Online radio stations, like Pandora, the option of electing an alternative set of rates and terms to those issued originally by the Copyright Royalty Board in 2007.   

It’s been a two-year battle between webcasters and Record labels.

Back in 2007, SoundExchange – a government agency regulating the business behind Online radio – set rates for streaming which could have put our favorite sites like Pandora out of business.  Without the “pureplay” agreement, Pandora would have had to be paying about 0.19 cents for every song streamed on its platform next year.

The new agreement will last 10 years and allow webcasters which elect these new terms to pay artists and rights owners a minimum percentage of all their revenues of up to 25 percent, and to pay a more significant annual minimum royalty, instead of payments per individual streams.

Tim Westergren, founder of Pandora, told the NYTimes, “This is definitely the agreement that we’ve been waiting for.”

SoundExchange views the deal as “experimental.”  In the press release John Simson, executive director of SoundExhange said, “Time will tell if revenue sharing is the right move for both the recording community and webcasters…but we’re willing to take the risk in the hope that artists, rights holders and webcasters can all benefit.”

Image source - Gutterslide.com

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