There's been plenty of backlash against the new royalty rates for webcasters, set by the Copyright Royalty Board at the suggestion of SoundExchange, a group spun out from the RIAA to handle royalty collection. The royalty rates themselves were ridiculously high, and would make it untenable for many small webcasters to continue, while taking a huge bite out of bigger players' revenues. Now, four of those bigger companies -- Yahoo, RealNetworks, Pandora and Live365 -- have sent a letter to lawmakers pointing out that not only do they have to pay the inflated royalties, they have to pay SoundExchange more than $1 billion a year in "administrative fees" for collecting them as well. The new royalty deal levies a charge of at least $500 per "channel" on webcasters, which SoundExchange says is to cover administrative costs. For somebody like Real, that adds up quickly, since it says it served 400,000 unique channels to its subscribers last year. Furthermore, since they're not royalties, there's a good chance they'll just line SoundExchange's pockets rather than be distributed to artists. This isn't particularly surprising, given SoundExchange's track record (nor its affiliation to the RIAA), but further illustrates how one-sided this royalty deal is. It was crafted only to benefit SoundExchange, and not the artists it purports to represent -- and it certainly doesn't do much for webcasters, other than decimate their industry. Hopefully the webcasters' letter will give a boost to the bill that's been introduced to overturn the CRB decision and set much more reasonable royalty levels.
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