Free for a Fee

The long, strange saga surrounding webcaster royalty payments is (mercifully) over after a multiyear fight.

Back in 2007, the US government’s Copyright Royalty Board set royalty rates for the online streaming of music that many in the business felt were unrealistically high for a nascent market, leading at least one prominent streaming service, Pandora, to threaten to pull the plug. Negotiations over an alternate pricing scheme broke down earlier this year, leaving things looking grim. With a slight nudge, however, the parties returned to the table and today announced an agreement that provides webcasters with a new royalty structure.

The fact that negotiations were even happening took Congressional action. In 2008, Congress passed the Webcaster Settlement Act, which gave the webcasters roughly a year to come to terms with SoundExchange, the entity that collects royalties on behalf of the rightsholders. But the deadline set in that act expired earlier this year, an event that triggered the breakdown of the negotiations.

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