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Online Radio is Safe…For Now

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At a Congressional hearing yesterday, SoundExchange announced that it would not enforce the new $500 per stream royalty rates originally scheduled to take effect on Monday, July 16th.

This decision may have been in part due to pressure from listeners. Tim Westergren, founder of Pandora, said that “this is a direct result of lobbying pressure, so if anyone thinks their call didn’t matter, it did.”

It also may have something to do with the fact that, if these new royalties were to be enforced, many of the online radio sites would have been forced to shut down completely. Guess how much money SoundExchange can squeeze out of online radio stations if all of them drop off the face of the earth?

Despite yesterday’s decision, this still doesn’t mean that rates aren’t going to go up. SoundExchange and the internet radio companies will need to settle on a new rate structure that’s fair to everyone involved.

For now, though, let’s all take a tip from one of the most prolific artists in the history of modern music, Lionel Ritchie, and “let the music play on, play on, play on…”

Online Radio Is Saved [Wired Blogs]

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