Posted on October 13, 2009 by David Oxenford

Copyright Royalty Board Requires Census Reporting for All Webcasters Except for Small Broadcasters

The Copyright Royalty Board has ordered that most digital music services provide "census reporting" of all songs played by their service, along with other information including the number of listeners who heard each song each time it was played.  The decision, published in the Federal Register today, is a follow up to the Notice of Proposed Rulemaking about which we wrote here, proposing this new permanent rule to replace the interim requirements that required that digital music services provide that information for two weeks each quarter.  The only exception to the new obligation was for "small broadcasters" - i.e. those broadcasters who are only obligated to pay the minimum $500 annual royalty. These small broadcasters will continue to report on the songs that they play for only two weeks each quarter.

The new general rule requiring census reporting applies to all digital music services that pay royalties to SoundExchange for the public performance of sound recordings. However, the obligations set out in this general rule do not replace different rules that may be contained in settlement agreements entered into between services and SoundExchange.  Settlements with recordkeeping exemptions include the broadcaster settlement (summarized here), which give stations the ability to exclude some of their tuning hours from the census reporting requirements that were included in that settlement, and the noncommercial settlement agreements summarized here.  The CRB decision also excludes those services where per performance reporting is not possible (such as satellite radio services where there is no easy way to count performances). 

For nonsubscription webcasters, the recordkeeping requirements require monthly Reports of Use which must contain information including:

  • The name of the service
  • The type of service (specific categories including broadcast music simulcast, broadcast simulcast of news program, music webcast)
  • The featured artist
  • The name of the song
  • The ISRC Code of the song or, instead of the ISRC Code, the following information:
    • Album Title
    • Marketing Label
  • The number of performances of each sound recording

The details of the obligations for webcasters and other digital services are set out in the rules published in today's Federal Register.  These are not easy rules to meet without using one of the commercial services that assist in counting performances.  These services can also assist services in completing the digital reporting requirements set out in the rules.  Digital services that use music should carefully review these rules to make sure that they are following the requirements set out in these rules.  In recent meetings, SoundExchange has indicated that it is going to emphasize reporting requirements, and potentially take action against webcasters who ignore their obligations.  Don't become an example.
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Posted on June 4, 2007 by David Oxenford

NAB Joins the Fray on Internet Radio - Appeals and a Request for Stay are Filed, And a Settlement Offer is Made to Noncommercial Webcasters

The past few days have been eventful ones in the battle over Internet radio royalties.  Appeals from the decision of the Copyright Royalty Board decision (see our memo explaining that decision, as well as our coverage of the history of this case) were submitted by virtually all of the parties to the case.  In addition, the National Association of Broadcasters, which had not previously been a party to the case, filed a request to intervene in the appeal to argue that the CRB decision adversely affects its members.  Also in Court, a Motion for Stay of the decision was submitted, asking that the CRB decision be held in abeyance while the appeal progresses.  The "appeals" that were filed last week are simply notices that parties dispute the legal basis for the decision, and that they are asking that the Court review that decision.  These filings don't contain any substantive arguments.  Those come later, once the Court sets up a briefing schedule and a date for oral arguments - all of which will occur much later in the year.  As the CRB decision goes into effect on July 15, absent a Stay, the appeal would have no effect on the obligations to begin to pay royalties at the new rates.

The Stay was filed by the large webcasters represented by DiMA, the smaller independent webcasters that I have represented in this case, and NPR.  To be granted a stay, the Court must look at a number of factors.  These include the likelihood that the party seeking the stay will be successful on appeal, the fact that irreparable harm will occur if the stay is not granted, the harm that would be caused by the grant of a stay, and the public interest benefits that would be advanced by the stay.  The Motion filed last week addressed these points.  It raised a number of substantive issues including the minimum per channel fee  set by the CRB decision, the lack of a percentage of revenue fee for smaller webcasters, and issues about the ability of NPR stations to track the metrics necessary to comply with the CRB decision.  The Motion raised the prospect of immediate and irreparable harm that would occur if the decision was not stayed, as several webcasters stated that enforcement of the new rates could put them out of business.

SoundExchange will have the opportunity to respond to the Motion, and the Court will then consider its merits. Watch to see a decision on the Motion by July 15.

In addition to the actions in Court, SoundExchange publicized an offer of settlement made to noncommercial webcasters, an offer which was similar to that made to small webcasters (summarized here) - extend the provisions of the Small Webcaster Settlement Act until 2010, with a few tweaks.  The SWSA for noncommercial webcasters required fees of between $250 and $500 per year for each noncommercial webcaster, as long as the webcaster had less than 146,000 aggregate monthly tuning hours of listening.  If the webcaster exceeded that listening, it would pay at the rate of .251 cents ($0.00251) per aggregate tuning hour over the limit.  The SoundExchange offer suggested a few tweaks, including requiring that noncommercial webcasters provide records of use of sound recordings - something not required under the SWSA.  The current requirements for Internet radio recordkeeping are summarized here.

The offer was made to a number of noncommercial webcasting groups, so there will need to be negotiations before any deal is final.  And as NPR had its own deal arrived at outside of the SWSA framework (a deal that is not public), they may well have concerns with this proposal which requires the same sort of recordkeeping about which its has expressed concerns in the Motion for Stay.

With all of these developments, the situation remains fluid, and changing on a daily basis.  Watch for further actions as the July 15 deadline approaches.   
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