Internet Radio Royalty Reminders - April 30 is the Last Date to Elect Small Webcaster Agreement and for Broadcasters to Pay Past Fees, and Don't Forget the Recordkeeping Obligations
We recently wrote about the agreements between SoundExchange and various groups of webcasters, which became effective under the terms of the Webcasters Settlement Act. These rates act as a substitute for the rates set by the 2007 Copyright Royalty Board decision setting Internet radio royalties for the use of sound recordings in the period from 2006-2010. The deal with broadcasters set lower rates than the CRB for 2009 and 2010, and also waived certain requirements otherwise applicable to webcasters, limiting the number of songs from the same artist that can be played in a given period of time (see our posts here and here). There is also a deal that SoundExchange unilaterally advanced to certain small webcasters which allows for a percentage of revenue royalty, but limits the amount of listening to these webcasters allowed at these rates, and imposes significant recapture fees if a webcaster sells its service to another company that would not qualify as a small webcaster (see our post here). April 30 is an important date under both deals, as it is the date by which small webcasters must elect the deal, and the date by which all broadcasters who elected the broadcaster deal earlier this month are to pay any back royalties which they owe for streaming from 2006 through the date of the agreement.
In talking to Internet radio operators, both broadcasters and small webcasters, many seem to be unaware of the records that need to be maintained to remain in compliance with the requirements of the deals. Both the small webcasters agreement and the NAB-SoundExchange settlement require "full census" reporting of all songs played by the service, which will include information for every song - including the name of the song that was played, the featured artist who performed the song, the album on which the song appeared, and the label on which the album was released. In addition, the webcaster must report on the number of times each song was played, and how many people heard each transmission of the song. Only very small broadcasters and "microcasters" under the small commercial webcaster deal, are totally exempt from these requirements. Under their deal, broadcasters need not provide all the information for up to 20% of their programming, but this percentage of the broadcast week that can avoid full reporting will shrink every year (see our post here for details).
These are not statistics that can be easily gathered in-house by most webcasters. Instead, most broadcasters or webcasters need to make sure they have a service that can provide this information. Many content delivery networks now bundle this information with their services, and stand-alone services like that provided by Ando Media can track this information. Some of these services will prepare all the reports of use that are required by SoundExchange and, for broadcasters, the statements of account that compute the number of performances that are necessary to determine the monthly fees that are now due from broadcasters - to be paid 45 days after the end of each month. So broadcasters should make sure that they are using such a service to track their listening, so that they can be ready to pay their fees for streaming done in March by May 15.
Lots of detailed information is required, and lots of statistics - so be sure that you are ready to comply.
My question is - does the full list of artists/songs/performances have to be sent to SoundEx every month? Our streaming provider has the reports and they can be accessed on line, but printing and sending those every month for every stream would be quite onerous over time.
Thanks for all your great information!
David,
What if a station is too small to do all of this reporting. What are the alternatives? Is there a blanket fee?
Thanks David. You provide excellent information. Kw
Mark:
Yes, reporting of the songs played, with all the associated information, is required on a monthly basis - in an electronic format. There is an Excel spreadsheet available for use on the SoundExchange website, and a users guide for electronically filing these reports here: http://www.soundexchange.com/licensee/documents/Reports_of_Use_Delivery_Spec.pdf
Some streaming providers will give you the reports necessary for filing with SoundExchange in the proper format, as will some of the independent companies that provide royalty reporting services, as described above.
Karole:
As we set out in the original post on this subject, there is a record-keeping exemption for very small broadcasters who stream less than 27,777 Aggregate Tuning Hours a year - essentially those who average less than 3 concurrent listeners. They can pay $100, on top of their $500 annual minimum fee, and be exempt from recordkeeping obligations. Otherwise, a station that wants to stream needs to comply with the requirements to be able to claim the statutory license and rely on the royalty rates that have been established.
Still no agreement for non-com edus?
Dave:
No agreement for noncommercial website operators except for the NPR deal between SoundExchange and the Corporation for Public broadcasting, about which we wrote several months ago: http://www.broadcastlawblog.com/2009/01/articles/internet-radio/soundexchange-and-cpb-reach-a-settlement-on-webcasting-royalties-more-deals-to-come/
Dave,
We are a NCE but not CPB qualified, so we aren't under the NPR/NFCB agreement. I thought that if there wasn't an agreement with stations like ours, then the old "218 concurrent listeners for $500" rule was still in effect?