A spokesperson for the Recording Industry Association of America said the trade group was still working on the issue.
Under the terms of the deal, smaller Webcasters would pay between 8 percent and 12 percent of their revenues or expenses, whichever was larger, sources said. The arrangement would cover performances between 1998 and 2004.
Small Webcasters had argued for years that it would be easier for them to pay a percentage of their revenues, rather than a per-song rate that could easily amount to more money than they were taking in from advertisements or other sources.
But the head of a trade group that represents many larger Webcasters said the terms of the agreement remained onerous. "This is a deal that a segment of the industry was swilling to accept because they were the segment facing bankruptcy," said Jon Potter, executive director of the Digital Media Association.
Potter said that established percentage-of-revenue royalty deals, such as those paid to songwriters, typically fall in the 3.5 percent to 4 percent range.
What constitutes a "small Webcaster" remained unclear, but earlier negotiations have set the limit at revenues of less than $500,000 per year, Potter said.
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