While all eyes were focused on the offer by SoundExchange and the rejection by small webcasters of a deal that would have reinstated the "percentage of revenue" basis for calculating royalty payments to be made by webcasters with a gross annual revenue of under $ 1.25 million and a monthly listenership of less than 5 million, it was the larger webcasters that eventually cut themselves a deal.
The Digital Media Association (DIMA) and SoundExchange reached an agreement yesterday that will benefit the biggest of the big — those webcasters with many, many, many, many, many, many (times infinity) channels, each of which is subject to a $ 500 annual minimum fee. Of course, all these manys (times infinity) add up pretty quickly, meaning that DIMA member sites such as AOL, Yahoo! LaunchCast, Pandora, Live365, MTV, and RealNetworks would find themselves paying an exorbitant amount before per performance royalties even began to accrue each year.
Those per performance rates will still be in effect under this deal, but the DIMA members — it only applies to those who have signed the agreement with SoundExchange, so if you don’t think this deal applies to you, it probably doesn’t — will pay no more than $ 50,000 in annual minimum per channel fees. In other words, an entity subject to this agreement need only pay the $ 500 per channel rate for the first 100 channels it streams.
In exchange for this maximum, these companies have agreed to (1) provide full census reporting for all of their streams within the next six months and (2) meet with SoundExchange every six weeks to discuss solutions to stream ripping, a key fear of the recording industry.
Much like the potential deal between SoundExchange and small webcasters, this only applies to a specific segment of the webcasting community, but it is being hailed by all as the first successful negotiation between SoundExchange and any webcasting interests. In addition, there is some potential for this agreement to be implemented industry-wide, as SoundExchange intends to seek ratification of the agreement by the Copyright Royalty Board.