SoundExchange, the not-for-profit that manages digital royalties for major labels, indies and artists, is offering to defer the recent Copyright Royalty Board rate increase for small webcasters. It would defer the increase to 2010, keeping place what SoundExchange describes as “a continued subsidy” in the form of lower payments. The move, announced in a grandstanding release (pdf) Tuesday afternoon, is in response to a House committee’s request last week to initiate “good faith private negotiations with small commercial and noncommercial webcasters.” Small webcasters would pay royalty fees of 10 percent of all gross revenue
up to $250,000, and 12 percent for all gross revenue above that amount. In exchange, those agreeing to the plan would have to stay in compliance with reports and payments.

But the proposal is destructive as far as SaveNetRadio, a coalition that includes small and large webcasters, is concerned. From the statement (pdf)  by spokesman Jake Ward: “The proposal made by SoundExchange today would throw ‘large webcasters’ under the bus and end any ‘small’ webcaster’s hopes of one day becoming big. Two of the most prominent webcasters, Pandora.com and Live365 are models of industry success but would be bankrupted by the CRB and by the SoundExchange proposals.”

Reuters: Small would be defined as operations with revenue of $1.25 million or less.

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