SoundExchange Rejects NAB Compromise Radio Royalties Proposal

In a public show of disappointment, National Association of Broadcasters President and CEO David Rehr wrote an open letter to SoundExchange Executive Director John Simson last Monday, indicating that SoundExchange had rejected its compromise royalties offer for radio stations with Internet streaming operations.

The rejection comes over three months after the NAB made its offer, which it claimed would enable the performance rights organization to meet its revenue goals while at the same time charging stations a more moderate amount.

"The detailed proposal presented to you and SoundExchange staff sought to achieve a number of important objectives," Rehr wrote, "such as: 1. To encourage greater participation by radio stations in Internet streaming than would otherwise be possible under the misguided CRB rates; 2. To enable greater radio station streaming activity, allowing revenue to artists through SoundExchange to grow beyond that achievable under the CRB rates; and 3. To address ancillary aspects to streaming above and beyond the CRB decision that would be beneficial to musicians and SoundExchange."

Rehr acknowledges that Simson offered to sit down and negotiate further with the NAB at its earliest convenience. But it might have been more convenient to have done so 96 days earlier, Rehr implied, when there was more time to act.

New royalty rates for digital music played on Internet streams went into effect last July. Since that time, SoundExchange claims to have reached accords with some of the largest webcasters over royalties caps, although to this day it isn't clear which webcasters it's referring to.