On Monday night SoundExchange informed the Digital Media Association that it will not agree to reduce the $1 billion minimum “administrative” royalty as previously reported unless internet radio services agree to technology mandates including an end to most mp3 streaming that SoundExchange believes leads to stream ripping.
DiMA members have previously rejected these restrictions several times and Jonathan Potter, Executive Director of the Digital Media Association has now replied rejecting the offer. (Read his statement after the jump.)
how“This is a disappointing turn after what we thought had been a very productive roundtable."
“The uncapped $500-per-channel minimum fee generates more than $1 billion annually for what the CRB determined are supposed to cover SoundExchange's administrative costs. This is far more money than needed to administer a mere $20 million in Internet radio royalties. DiMA would like to get the per-channel minimum off the table and SoundExchange has said publicly that it does not expect to collect this money.
“DiMA and our members are happy to cooperate on issues of common interest even if outside the scope of the CRB decision, but SoundExchange has demanded enforceable technology mandates that are unreasonable, unworkable and way off-topic. They seek to leverage this absurd fee to impose mandates that they have unsuccessfully sought elsewhere.
“DiMA companies are prepared to set a time to meet with the SoundExchange Board to negotiate the royalty rates for the 2006-2010 CRB term. At that time, we can also discuss the establishment of working groups that would address other technical industry concerns. In the meantime, we would like to get the per-channel minimum off the table and move on to royalty rate negotiations.”
