Reporting from Washington — The music won’t stop for Internet radio after a group of webcasters struck an agreement with SoundExchange, the organization that collects royalties for musicians and record companies, over payments for playing music online.
The settlement ends a 2 1/2 -year-old dispute that had threatened to silence the nascent Internet radio business and had forced some people who started online stations as a hobby to quit for fear of accruing expensive royalty bills.
The deal is part of a series of agreements made this year that cover various sectors of the industry, including small webcasters and conventional radio stations that simulcast their broadcasts online, and have resolved much of the controversy.
Tuesday’s settlement allows websites that stream music to avoid per-song royalty payments that were set in 2007 by a special federal court and that many Internet radio sites said would force them out of business. Instead, Pandora Media Inc. and other large webcasters can choose an alternative rate structure that allows them to pay lower per-song royalties or 25% of their revenue — a major break, given that many webcasters don’t make much money yet.
