The SaveNetRadio.org coalition managed to get some serious support from radio listeners during its protest last Tuesday. Large companies such as Yahoo! Launch, Rhapsody, Pandora.com, Live365, MTV Online and many others agreed to cut off the music on June 26 as a protest to an impending retroactive royalty rate increase.
Thursday, webcasters joined together at Capitol Hill for a hearing to discuss the ruling on the royalty rate increase. Unfortunately for the protesters, House Small Business Committee Chairwoman Nydia Velazquez decided not to intervene and advised the webcasters to try and reach a compromise with SoundExchange, the company that collects royalties on behalf of music labels.
"I really don't think Congress would be the best type of vehicle to resolve this type of issue," she said after the testimony of seven witnesses, including independent record-label owners, musicians, and Webcasters. "July 15 is just around the corner, and I hope the two parties can come together and resolve this issue."
Back in May, SoundExchange offered a compromise allowing small broadcasters to enjoy the existing lower royalty rates through 2010. Nonetheless, webcasters rejected the proposal saying the definition of a small broadcaster is too narrow. Instead, several alternatives have emerged for a compromise between SoundExchange and webcasters, among those is the so-called Internet Radio Equality Act, which proposes charging Webcasters the same royalties as satellite radio broadcasters – Satellite radio companies Sirius and XM pay about 7.5% royalties. The future of internet radio stations remains uncertain as the two parties on this issue must come together and find a solution before July 15.