Last year, an obscure federal panel ordered a doubling of the per-song performance royalty that Web radio stations pay to performers and record companies.
Traditional radio, by contrast, pays no such fee. Satellite radio pays a fee but at a less onerous rate, at least by some measures.
As for Pandora, its royalty fees this year will amount to 70 percent of its projected revenue of $25 million, Westergren said, a level that could doom it and other Web radio outfits.
This week, Rep. Howard L. Berman (D-Calif.) is trying to broker a last-minute deal between webcasters and SoundExchange, the organization that represents artists and record companies. The negotiations could reduce the per-song rate set by the federal panel last year.
The two sides appear to be far apart, however, with Berman frustrated.
"Most of the rate issues have not been resolved," Berman said. "If it doesn't get much more dramatic quickly, I will extricate myself from the process."
[emphasis added]
If anyone can explain that comment of Berman's I'd be interested to hear it. Does he want them to show up in costume? A musical score, perhaps? No, too many licensing issues.
I do love this as an example of DC in action. First, I pass a law saying that Joe can claim your head. Then you complain that you don't want to cut off your head. Joe insists. I "facilitate" negotiations between you and Joe. Joe says, "Give me your head." You say, "No!" I throw my hands up and say, "If you two can't manage to reach some kind of Reasonable Compromise here, well I wash my hands of it." Brilliant.
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