Webcasters, RIAA Sign Final Deal

On December 14, the music industry and small webcasters concluded their long and often-acrimonious negotiations on royalties. The two parties—the Recording Industry Association of America's (RIAA) "SoundExchange," a royalty-collecting body, and the Voice of Webcasters (VOW)—filed an agreement with the US Copyright Office in Washington that details generalities agreed to under the Small Webcaster Settlement Act (SWSA), signed December 4.

Under the agreement, eligible small webcasters will pay 8% of their gross revenue, or 5% of expenses incurred during the period October 28, 1998–December 31, 2002, whichever is greater, in three installments, the last due October 31, 2003. For 2003 and 2004, small webcasters will pay 10% of their first $250,000 in gross revenue and 12% of any gross revenue above $250,000 during the applicable year, or 7% of expenses during the year, whichever is greater. Payments for 2002–2004 must be paid on or before the last day of the next succeeding month.

Alternative payment calculations: Webcasters may opt instead to pay minimum fees for the following "relevant periods": (1) $500 for the period October 1998 to December 1998; (2) $2000 per year for "eligible nonsubscription transmissions made in any part of the calendar years 1999 through 2002"; (3) $2000 per year in 2003 and 2004 for small webcasters with gross revenue during the preceding year of not more than $50,000 and expected gross revenue during the applicable year of not more than $50,000; (4) $5000 per year in 2003 and 2004 for those webcasters whose gross revenue exceeded or was expected to exceed $50,000 in the applicable year.

The SoundExchange/VOW agreement also requires webcasters to keep records of their use of copyrighted materials, and to cooperate in an SWSA-mandated report to Congress. The terms of the SWSA required completion by December 15.