Webcasters dubious about SoundExchange offer

After months of negotiations with SoundExchange, the record industry's royalty-collection agency, small Net radio stations say the group's compromise offer is unacceptable, AP reports.Under the latest proposal, small webcasters with earnings of less than $1.

After months of negotiations with SoundExchange, the record industry's royalty-collection agency, small Net radio stations say the group's compromise offer is unacceptable, AP reports.

Under the latest proposal, small webcasters with earnings of less than $1.25 million a year could pay a cut of annual revenue in royalties, rather than the per-song, per-listener scheme that the Copyright Royalty Board imposed on the industry this spring.

But the small webcasters say the offer is a "divide and conquer" strategy designed to destroy the nascent industry's bargaining power. "This would be a huge step backwards for us," Bill Goldsmith of RadioParadise.com said.

Rusty Hodge of SomaFM in San Francisco said the $1.25 million ceiling is too low "by any type of radio standards." He wants the group to follow the US government standard, by which a "small" broadcasting company earns up to $6 million.

Instead, he said SoundExchange should follow the U.S. Small Business Administration's standard for a small broadcasting company, defined as earning $6 million or less in annual revenue.

The offer is on the table until Sept. 14, according to SoundExchange. The other alternative: Pay the CRB rates. In a statement, John Simson, SoundExchange's executive director, said the proposal "takes the uncertainty out of the air as to most of their programming and lets them continue streaming."