Copyright Royalty Board Proposes Full "Census" Reporting for Services Paying Royalties to SoundExchange
Just when you think that the year will come to a quiet end, something always seems to pop up. Today, the Copyright Royalty Board announced a Notice of Proposed Rulemaking that would change the reporting requirements for services that pay royalties for the use of sound recordings to SoundExchange. The proposed new rules would require that Reports of Use submitted by services relying on the statutory royalty contain "full census reporting" of all songs played by any service. Services would include all users of music who pay royalties due under Sections 112 or 114 of the Copyright Act - including Internet Radio, satellite radio, digital cable radio, digitally transmitted business establishment services, and radio-like services delivered by other digital means, including deliveries to cell phones. This reporting requirement would replace the current system, about which we wrote here, that only requires reporting for two weeks each quarter. Under the new rules, an Internet radio service would have to submit the name of every song that they play to SoundExchange, along with information as to how many times that song played, the name of the featured artist, and either the recording's ISRC code or both the album title and label. Comments on this proposal are due by January 29.
Currently, the quarterly reports are filed electronically using an ASCII format and using either an Excel or Quattro Pro spreadsheet template as created by SoundExchange. The Board asks for comments as to whether there are technological impediments to providing this information in this manner, and if other changes should be made to more easily facilitate the delivery of this information. The Copyright Royalty Judges who make up the CRB expressed their opinion that the full census reporting is preferable to the limited information now provided, so that SoundExchange does not need to rely on estimates or projections to insure that all artists are fairly compensated when their works are played. Using census reporting, all artists can be paid based on how often their songs are actually played.
The CRB did note that there is still the need for some approximation for certain services that pay the royalties. For instance, as satellite radio (Sirius XM) and digital cable radio do not have the technology to compute how many listeners are listening to every song, they have to come up with some proxies for that number based on how often the song was played. In the Internet radio world, small webcasters already had agreed to census reporting in the Small Webcasters Settlement Act, and the requirement was carried forward under the unilateral deal extended by SoundExchange to some small webcasters last year (see our article here). Large webcasters agreed to this reporting as part of their deal to limit the minimum fees which would have otherwise been due under the CRB decision (see our summary here).
Where this change is likely to have the most impact is in connection with the operations of broadcasters who also stream their programs on the Internet. Noncommercial broadcasters, such as college radio stations, have repeatedly complained that their small staffs to not have the ability to maintain these electronic records, especially where the stations are volunteer-programmed by DJs who select their own music on the spot. Some of the most creative and eclectic of broadcasters may have the most problem with this rule. Commercial broadcasters have also had difficulty with the reporting requirements, especially when dealing with syndicated programming, where the syndicator does not provide the necessary information about the recordings that it includes in its programming to the stations that carry such programs. Some of the current systems used for paying the royalties have had difficulty tracking the number of "performances" (songs played times the listeners to each song) played by broadcasters using syndicated programming, and these problems will only be magnified by the adoption of this proposal.
Parties that will be impacted by this proposal should start gathering their information now, and be prepared to file comments on the proposed increase in reporting information by the January 29 deadline. If there are improvements that can be made in the system, now is the time to ask.
This would finally make it possible for independent artists to be tracked and paid. It was my main problem with SE, as DJs I know simply don't play artists in the SE database.
DJs and listeners both want full playlisting/linkage on blogs for new artists... so it doesn't seem like a huge problem... I always wondered how my favorite artists would ever get paid in the "2 weeks each quarter" system.
now those rates are a different issue....
The stations I deal with have had a hard enough time reconfiguring their processes and infrastructure to accommodate the 2-week reporting, and now they want to raise the recordkeeping bar again? Stupid, stupid, stupid idea.
ISRC is a joke, unusable, and ATH was/is significantly difficult enough that the majority of stations can't handle it. And now they want to eliminate ATH and move to actual total performances? Good luck with that, guys. Watch as an already tiny compliance drops to zero.
Re: Jeff's comment above about getting more independent artists paid ... in theory, yes, that could happen. But I'd like to see the CRB put the heat on SoundExchange to actually ***locate and pay*** the artists they have already collected those millions of dollars in royalties for before they mandate a whole new set of enhanced recordkeeping rules. (To say nothing of SE's "royalty forefiture" insanity, dodgy lobbying expenses with musicFIRST, etc. etc.)
If I were an artist or broadcaster with a dog in this fight, I think I'd work to make the CRB mandate at *least* an 80% royalty dispersal rate from SE before **anybody** starts talking about bringing new reporting requirements online.
I've watched DJ's attempt to "spin" solo in real time and log all the selections as they play them, and it's almost like watching a one-legged man try to play soccer. This would largely force all music to be pre-programmed, and would lend credence to the labels' argument that broadcasting is nothing more than a "music delivery service" and that disc jockeys provide no added value.
Broadcasters: Stop the madness; turn off your streams! I did at the end of '07 and haven't looked back. The tyranny of the CRB and the RIAA is NOT a necessary element of a successful radio business model; reject it!
To Greg Jablonski: Don't look now, but the recording industry is gaining Congressional support to force over-the-air broadcasters to begin paying artists for use of their songs. And though I support the NAB in this battle, I'm afraid that they will lose it either this or next year--the recording industry has too much high-powered support from the new vice-president (Joe Biden) on down.
What I'm saying is that your argument to stop streaming and therefore avoid the CRB and RIAA isn't going to hold water for much longer.
To Ted Chittenden: I'm well aware of the machinations in Congress on both sides of this issue. I hope the CRB/RIAA "alliance" doesn't prevail; but if it does, I'm fully prepared to modify my programming to something that won't involve royalties and can be streamed. I realize that many broadcasters, unfortunately, don't realistically have that option.
To Greg Jablonski,
If nothing else, for the CRB to launch a proposal like this while their Webcasting royalty is still being challenged, should silence any doubt as to whether they and the RIAA are joined at the hip.