Record Labels Back Off on Royalties Owed
Small Internet radio broadcasters (Web casters) got a break on Friday when record labels belonging to the Recording Industry Association of America (RIAA) agreed to waive four years' worth of royalty fees that were to be paid to the record labels by Sunday, October 20th. The dispute is over the amount of royalties that Web casters owe and must pay record labels and artists for the songs they transmit. These rates were originally to have been negotiated between individual Internet stations and the record label companies, but only one royalty agreement was ever finalized; Yahoo, Inc. and the RIAA reached a deal, which established the basic rates now being used by the Librarian of Congress. Small Web casters complained that the rate of nearly $100/year/listener would put them out of business. A federal bill was pending that would have provided a discount rate for small Internet stations, and had passed the House, but last week was derailed by Sen. Jesse Helms just before the Senate recessed. After the bill died in Congress, the RIAA announced that it would only seek a small portion of royalties owed, and asked each Web caster to make a good faith down payment of $2,500 by Monday, October 21st. In a rare coalition of the RIAA, recording artists and labor unions all on the same side, the strongest proponents supporting full payment of the royalties by Web casters were artists' unions and trade groups, who stand to collect royalties of 50% from Web casters.