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Thursday, May 24, 2007

KEXP on SoundExchange’s Webcasting Ruling

posted by on May 24 at 14:05 PM

As I said in this post, the future of many webcasters is up in the air. The Copyright Royalty Board has raised the rates to stratospheric heights, and even though SoundExchange, the non-profit collecting these fees, has agreed to charge smaller webcasters less, there are still the questions of definition (How small is small? Do large conglomerates owning many small webcasters get charged the small webcasting fee for each? What if a webcaster goes viral and suddenly expands in listenership but not revenue? Why do small webcasters get penalized just for expanding and getting good at what they do?).

KEXP issued this statement today about the SoundExchange offer, which is not extended to KEXP since it is a public radio station:

“This gesture doesn’t reduce any of the financial burden the CRB decision brings to KEXP. And it does nothing to address the non-commercial status of public radio. We’re not opposed to paying royalties. Public radio has been paying them all these years. We are, however, opposed to 30 to 50-fold increases in rates. Unless we bring about a change, this blows a frightenly large hole in our budget. And as a non-profit, public service radio station which tirelessly connects artists to their first audiences, and which directly drives record sales, this is simply very discouraging.”

I also asked Tom Mara of KEXP a couple of questions about the real impact of the rulings:

How will this ruling affect you guys, and what will you do if it doesn’t get revised?

KEXP will incur a significant financial burden from this ruling. While we’re a public service mission driven organization we’re also marketdependent. To counteract the impact of this ruling, KEXP would likely cut back on current services and delay or kill the launch of programming or online initiatives. This abruptly constrains our work. We will do whatever we can to overcome this alarming CRB ruling so that we may continue enabling as many people as possible to discover and experience the wide and deep array of music we champion.

Will you have to stop broadcasting on the internet?

No, but as mentioned above, we may need to make cuts to current services and new initiatives. KEXP expects that the additional expenses that will be incurred from this decision will reach the six-figure range in approximately one year. And this amount steeply increases year-to-year as the rate climbs steeply year-to-year.

What are you doing to get the word out about supporting the revision acts in Congress, especially as a 501(c)3 that can’t lobby or anything?

We have a page on KEXP.ORG (informing our listeners about the CRB ruling, both the Senate and House bills (Internet Radio Equality Act, H.R. 2060 and S. 1353) as well as various websites that are providing current information surrounding this important issue, including the public broadcasting advocacy site, We’re updating this section as things develop.

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Reaching a six-figure range over a year? I wonder what KEXP DJ's salary that amount equals... hmmm...

But I digress. This decision bites, and Cantwell seems like the perfect senator to lobby against this given her previous employment.

Posted by Joshua H | May 24, 2007 5:02 PM

Regarding the definition of a 'small webcaster' - it's the same as what the SWSA was. The old SWSA applied to all commercial webcasters with under $1,250,000 in revenue or investment so it was really designed for small guys. On the non-comm side, the SWSA also applied to all college and community broadcasters, meaning they won't be charged the increased rates. Soundexchange had a prior agreement with NPR they were not included in SWSA. They are exploring that right now and should have something worked out by early next week.

Posted by Meinert | May 24, 2007 7:13 PM

This decision blows ass on so many levels. What hasn't really been addressed enough is how this will affect the little lables out there (like ours, The Swingline). We don't get crap for royalties and really don't expect too...what we do benefit greatly from is stations like KEXP and the other smaller on line stations playing our records. The more of them that die...the fewer people actually hear our records. I'm so tired of major lables doing so much to protect their shitty output... if they didn't put out so much crap maybe the margin on what they do sell wouldn't be so shitty

Posted by Ben Swingline | May 25, 2007 4:34 AM

Ben - sign your label up at Soundexchange. If your records are getting internet radio play, your label is due royalties. Check out

Next week Soundexchange should be announcing a deal with NPR that will help out KEXP. It is incredibly important that KEXP is taken care of, but the bills in congress are not the way to do it. They hurt artists and labels, straight up and should not be supported. The better idea is to give small webcasters and non-commercial stations a break will making the huge corporations pay fair market value for use of sound recordings.

Posted by Meinert | May 25, 2007 9:16 AM

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