Wired, July 13, 2007
By Eliot Van Buskirk

Webcasters only have about three days and ten hours left until they owe royalty payments to SoundExchange under new rates that charge webcasters for each song they stream to each person, require a minimum payment per channel that would instantly knock Pandora and many other innovators offline, and will be retroactive to the beginning of 2006... unless Congress does something (or some other resolution can be made) by the end of this week.

And that just might happen. Today, Representative Ed Markey (D-Massachusetts) called parties representing record labels and webcasters before the House Commerce Committee on Energy and Commerce to try to broker a deal that would allow online radio stations to survive in something similar to their current form, while still paying labels and artists their due.

The as-yet-unpassed Internet Radio Equality Act proposes that webcasters switch to a percentage royalty system similar to the 7.5-percent-of-revenue fee structure enjoyed by satellite and cable radio broadcasters.

The record labels' problem with that is, I suspect, that webcasting is cheap enough that operators' total revenue can be low — or even non-existent, in which case the labels and artists would get nothing from the streaming of their music.

A deal between the two parties will probably involve something other than a straight percentage fee

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