SoundExchange is offering an olive branch of sorts to smaller Internet radio outlets as part of an ongoing negotiation over royalty rates.

Under the new proposal, webcasters who make less than $1.25 million in total yearly revenue can continue paying the same royalty rates that they've paid since 1998-about 10% to 12% of revenues -- until 2010.

What happens after 2010 is unclear. This is not the first time SoundExchange has offered different royalty terms to smaller webcasters. Internet radio supporters have rejected these offers, however, saying they discourage small webcasters from growing.

SoundExchange says several webcasters not actively involved in the ongoing negotiations have contacted the group to inquire about initiating service, and says it is sending this offer to them directly. They have until Sept. 14 to sign the deal.
The small-webcaster, big-webcaster division is one being played out on both sides of this contentious issue. SoundExchange is trying to drive a wedge between the many small webcasters-who have the most to lose under the new music royalty structure-and the larger behemoths like AOL, Yahoo and others. Meanwhile, those same behemoths-represented by such lobbying organizations as the Digital Media Association-are trying to keep their cart securely hitched to the broader Internet radio cart.

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