Should All Broadcasters Pay the Same Royalties?

When asked in an NPR interview about special deals for small, independent or non-commercial webcasters, John Simson of SoundExchange says: "Whether you're a corner market versus a big supermarket," Simson says, "you both have to pay the same amount for the milk that you sell. It's not like the little guy gets a cheaper price for milk."

But if I follow that logic, we shouldn't have to pay anything at all, because over-the-air broadcasters do not have to pay these royalties (the "sound recording copyright royalties"). Only digital broadcasters. (Both over the air and digital broadcasters also pay royalties on the "composition copyright", aka the composers' royalty. Only internet/digital broadcasters have to pay the additional "sound recording" copyrights.

Smaller webcasters have always wanted a "percentage of revenue" deal. The big guys, like AOL and Yahoo, want a rate based on how much music is consumed by their audience... either an "aggregate tuning hours" method, or a per song per listener. This is because radio makes us such a small percentage of their over revenue that a percentage of revenue deal would actually cost them more than the consumption-based fees.

I'm not sure if John Simson is stating that he opposed a percentage of revenue deal for smaller webcasters. In the past, SoundExchange has supported a percentage of revenue deal (albeit at 3 times the current rates).

John: if you're going to compare rates that broadcasters pay, compare the rates that all broadcasters pay - especially those that don't pay a dime!