Friday, June 08, 2007

SoundExchange wants "administrative fees" of $1 billion a year

In March 2007, the U.S. Copyright Royalty Board decided to increase Internet broadcasters rates by 30% per song streamed over the internet, the CRB also added a minimum annual fee of $500 per Internet radio "channel."

On June 7th, Yahoo, RealNetworks, Pandora, and Live365 sent letters to US lawmakers emphasizing they owe SoundExchange "administrative fees" of more than $1 billion dollars a year for collecting the increased CRB royalities effective July 15th unless the Internet Radio Equality Act passes Congress.

SoundExchange, the non-profit music industry entity, admits the levied charge of $500 per "channel" is supposed to only cover their administrative costs. Last year, SoundExchange collected a total of $20 million dollars from the Internet radio industry. Examining the new "administrative fee", means that RealNetworks which hosted 400,000 unique subscribed channels in 2006, would owe an annual administrative charge of 200 million dollars in addition to the retroactive 2006 rate hike per song played.

"While we don't imagine SoundExchange would keep this $1 billion all to itself, this lack of clarity is absurd," RealNetworks spokesman Matt Graves told CNET