The future of small internet radio stations looks rosier after US legislators approved a last minute royalty payment deal yesterday.
According to news agency Reuters, the deal allows smaller 'webcasters' to pay a percentage of revenue or expenses to the musicians and record labels whose songs they use, rather than a flat per-song rate set by the Library of Congress in June.
The proposed flat fee of .07 cents a song may have sunk many of the smaller radio stations, which are run on shoestring budgets.
Webcasters and the music industry must now take the deal to the Senate, where Judiciary Committee Chairman Patrick Leahy offered his support.
Under the terms of the deal, small webcasters would pay eight per cent of their revenues for broadcasts between 1998 and the end of 2002, increasing to 10 per cent over the next two years, or 12 per cent if the station's revenues exceed $250,000.
Alternatively, webcasters would pay five per cent of their expenses for the 1998-2002 period and seven per cent over the next two years, if that amount was greater.
The deal only applies to webcasters that will have earned less than $1m in total from 1998 until the end of this year. Others will have to pay the flat rate per song.
The deal seems to have satisfied everyone, with trade groups for the recording industry, small webcasters and the American Federation of Television and Radio Artists all coming out in favour.
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