News

A music industry group Tuesday said small Internet radio broadcasters could pay discounted royalty rates for streaming music online through 2010, a move that could keep the struggling businesses alive.

SoundExchange, the music industry group that collects royalties from these small stations and distributes them to artists and record labels, said those who accept the offer would not have to pay new higher royalty fees due July 15.

Instead, qualified Webcasters — those earning $1.25-million (U.S.) or less in annual revenue — would have until Sept. 14 to accept SoundExchange's offer and pay royalty fees of 10 or 12 per cent of annual revenue.

Both sides are aiming to resolve a dispute over the new royalty fees, which smaller providers feared would put them out of business.

The agreement offers covers recordings of SoundExchange members, which represents more than 20,000 recording artists and 3,500 record labels, including all the major recording companies.

Those who do not sign the agreement would be subject to higher royalty rates mandated by a panel of three copyright judges earlier this year.

The judges ruled in May after the music industry and Webcasters were unable to agree on a royalty system to replace a previous set of agreements that expired Dec. 31, 2005.

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."

Larger players, such as major commercial radio stations owned by Clear Channel Communications Inc. and online companies like Yahoo Inc. and Time Warner Inc.'s AOL, have also argued that the new higher rates could cripple the emerging business of streaming music online.

SoundExchange, which said House lawmakers encouraged it to offer the new agreement to small Webcasters, said it is still working on an industrywide resolution to the conflict.