Is SoundExchange offer no robbery?

Following on from the Internet Day of Silence, SoundExchange have offered a compromise on the proposed new royalty rates for American webcasters. It's reduced its demands from the ridiculous to the merely stratospheric, proposing a cap of "just" $2,500 per broadcaster a year.

It's good news for services which offered many channels, but the prospect of a ceiling of two and a half grand might still prove too much for smaller broadcasters; more to the point, the cap will remain in place until 2008. An unspecified month in 2008.

The idea seems to be to derail the protests against the eye-watering demands for royalties and then bring them back - perhaps in as few as five months - when the campaign for commonsense royalties would be faced with having to start from scratch again. In effect, SoundExchange have put the kids' best clothes on for a visit from social services, and will have them back in rags after they've gone.

Meanwhile, LastFM's supposedly principled sitting-out of the day of silence seems to have backfired, as SoundExchange's Jon Simson has decided that they should be paying more, too:

Interesting to note that one of those services, that paid us very low royalties last year, just was sold for $280 million to CBS. Here they are using our music to build a business at a subsidized rate and then they flip it to a big company for a lot of money and we don’t get a percentage of that, where’s the fairness to the performers whose music is being used to create value in these companies?

Well, Jon, it could be argued that the value of Last.FM lies not in the music - for which you have been paid a fair royalty rate, one to which you had agreed - but in the people who use the service. They are the ones who provide the data which Last.FM is based on, it is they - and their community - which CBS has bought, not your music. In fact, I'm sure, Last FM would be content to not pay you any money at all, remove the music altogether, and allow the community to discover new music through their service, and then go somewhere else to collect it from. Of course, once they've gone outside the system they might seek the music from those pesky illegal services. But don't worry, because at least you'll have taken your stand.

Oh, and you know what? The Last.FM user base - the people who built Last.FM - they don't seem to be wining they're not getting paid. Because, presumably, they're happy with a system where everyone benefits a little.