Indie deal for internet radio

Stars will be able to extend their reach

A trial scheme to share the profits of internet radio could see UK artists share their music with users across the world.

Internet radio has struggled economically because of the internet slump and the lack of deals with record companies over royalties.

A deal has been struck with globally-based internet radio stations to cover more than 200 artists on independent UK labels including Tom Jones, Badly Drawn Boy and Paul Oakenfold.

Paul Oakenfold is among the artists

But an unrelated and much larger deal with US record labels has come under threat because of a dispute between artists and their labels.

Under the UK deal, internet radio stations will pay a share of their own profits to be legally allowed to play thousands of the artists' songs.

The system has been engineered by the UK's Association of Independent Music (AIM), which is anxious its members do not miss out on new media listeners.

Spokesman Sam Shemtob said: "We have consulted with internet radio stations before coming out with the system, so we are pretty confident that the webcast industry in the US and beyond will be very willing to participate in this."

British-based internet radio stations have already signed up to the scheme.

But Mr Shemtob said: "It doesn't matter where the station is based.

"Listeners will benefit from this because they can log on to a website wherever it originates from in the world."

It is believed disputes and the lack of a royalties structure have helped doom more than 1,000 internet stations in the US alone.

But the lack of a UK deal with major labels means internet radio's battles are far from over.

Split row

Keith Harris, president of the UK's Music Managers' Forum, said: "With traditional radio saturated virtually everywhere, webcasting is vital.

"This deal, provided there is adequate provision for artist payments, makes it easy for us to be played and paid and will help propel UK artists internationally."

But in the US a deal between internet radio stations and major labels could founder over how profits are to be split.

Webcasters have agreed with record labels in America to pay between 8-12% of their revenues in the licensing deal.

But musicians want explicit guarantees that they will be paid royalties directly, rather than through record companies.

And without their agreement Congress will not be able to ratify the deal this week as planned.