Barbara Dacey is relieved.
A temporary eleventh-hour agreement last weekend between radio webcasters and a record industry royalty collection organization ensures that Internet-based streaming radio stations will operate under existing royalty fees. Meanwhile, negotiation continues between webcasters and Sound Exchange, which collects royalties for the Recording Industry Association of America.
At issue is a proposed fee structure that would increase royalty costs between 700 and 800 per cent for a webcaster such as mvyradio.com.
"Sound Exchange has agreed not to implement the fee schedule proposed to begin on July 16," said Ms. Dacey, who is director of worldwide programming for mvyradio.com and WMVY 92.7 in Vineyard Haven. She said the reprieve gives webcasters and the record industry time to negotiate a fee schedule.
"We understand that this is a temporary [situation] that gives us time to negotiate further with Sound Exchange," Ms. Dacey said. She added:
"We are uncertain what the outcome will be. Our goal is keep webcasters in business - and for us to stay in business."
Ms. Dacey and other webcast executives credit the outpouring of support from web listeners for the last-minute turnaround by the Sound Exchange. "This is a direct result of lobbying pressure, so if anyone thinks their call didn't matter, it did," said Tim Westergreen, founder of Pandora, a popular webcasting service. "That's why this is happening," Mr. Westergreen told Wired magazine last Saturday.
Indeed, Rep. Ed Markey from Massachusetts convened a hurried meeting among members of Congress, webcasters and the record industry late last week in an attempt to broker a deal. And over the weekend, two members of Congress proposed a bill to provide a 60-day window for the parties to negotiate while operating under current agreements. An estimated 135 members of Congress co-sponsored the legislation.
Industry analysts over the weekend estimated that if webcast rights fees shake out as they have in other rights-based media businesses, the ceiling will likely end at seven to eight per cent of webcast revenue. Sound Exchange proposed a $500 minimum per-station fee for large companies with hundreds of stations and a maximum $50,000 cap for smaller users, applied against a rights fee structure.
But webcaster hearts sank late last week when a federal appeals court denied an appeal to stay enactment of the new fees approved by the Library of Congress Copyright Royalty Board. As Congressional interest heated up late last week, Sound Exchange reversed its position which it had described earlier as "etched in stone."
Last week's brinksmanship was potentially expensive for mvyradio, based on an analysis provided several months ago by Joseph V. Gallagher, president of Aritaur Communications, the company parent based in Newport, R.I. The proposed schedule, retroactive to January 2006, would cost mvyradio an estimated $200,000 in combined rights fees for 2006 and 2007. The station historically pays $7,000 to $8,000 a year, Mr. Gallagher estimated several months ago.
Mr. Gallagher noted that expense associated with rapid listener growth has outpaced the relatively new media's ability to generate revenue. Referring to the proposed $100,000 royalty fee structure, Mr. Gallagher said, "We didn't generate anywhere near $100,000 in revenues - not even close."
Success has increased the stakes for mvyradio radio.
As a pioneer in the webcast industry, the station has developed six custom online stations, podcasts of programming, free downloads of the station's mix CD Fresh Produce and an archive which includes live tracks that the station records itself at music festivals. The radio web site has been ranked among the top 20 webcast stations among thousands available worldwide. The radio station has been webcasting for nine years.
With an estimated 100,000 listeners, mvyradio is the online sister of WMVY 92.7, which attracts 22,000- 30,000 listeners. Ms. Dacey reiterated the station's commitment to persevere in the program model it has built in order to compete successfully for listeners with broadcast media giants.
Two months ago, the station introduced friendsofmvradio.com, encouraging listeners to support the webcast station with money and service donations. Ms. Dacey had no hard numbers on the fledgling idea but said this week that "the response has been gratifying."
The Island webcaster may be a sophisticate and elder in a burgeoning industry with many new and undisciplined entrepreneurial types, reminiscent of other explosive growth new media over the past years - from cable television to internet.
Observers said Sound Exchange was willing to wait to negotiate and in fact agreed not to initiate lawsuits but sounded resolute in public comments that webcasters must work with the record industry to police what is known as streamripping - unauthorized listener downloading of copyrighted webcast music - and that webcasters must pay fees in a timely fashion and must keep track of copyrighted music for the purposes of fee payment.