The Copyright Royalty Board today denied the Motions for Rehearing of their decision raising the royalty rate for the use of sound recordings on Internet radio stations for 2006-2010.  The Board found that the Rehearing requests did not demonstrate that there was any manifest error in the initial decision, and did not introduce any new evidence that could not have been introduced in the original hearings.  Finding that these standards for rehearing were not met, the motions were all denied.  The Board decision was brief, not addressing in any specifics the issues raised in the rehearing motions. 

The Board did, however, decide to issue two clarifications to its decision.  It decided that, for administrative convenience, they would permit royalties for a transition period to be paid on an aggregate tuning hour basis for 2006 and 2007.  For 2006, the ATH rate would be $.0123 per hour for Internet-only webcasters, $.0092 per hour for broadcasters who stream their over-the-air music programming, and $.0011 for broadcast stations which use only incidental music (e.g. news/talk and sports stations).  For 2007, those rates would rise to $.0169 for Internet-only webcasters, $.0127 for the simulcast of a terrestrial broadcast station’s signal for a music station, and $.0014 for the simulcast of a talk radio station.  These numbers appear to assume 11.5 songs per hour for broadcasters, and 15.4 songs per hour for Internet-only stations.Continue Reading Copyright Royalty Board Denies Rehearing Motions – Next Stop, Court of Appeals

We have written much on the Copyright Royalty Board decision on Internet Radio Royalties, and have received many questions and comments on the decision.  To try to put all of the answers in one place, we have put together a comprehensive memo on the decision.  The entire memo can be found here. 

In the memo, we provide a background of the case, a summary of the decision, a discussion of what comes next, and answers to some commonly asked questions.  Those questions follow here, but for a full understanding of the case, we urge you to read the complete memo. 

 To whom does the decision apply? The Board’s decision covers only non-interactive webcasters operating pursuant to the statutory license. Essentially, a webcaster covered by this decision is one that operates like a radio station – where no listener can dictate which artists or songs he or she will hear (some limited degree of consumer influence is permitted, but a webcaster must comply with the restrictions set out in the Copyright statute). These restrictions forbid prior notification to the listeners of when any specific song will play, and restrict the number of songs by a specific artist that can be played. For more information on these restrictions, see our memo on Internet Radio – The Basics of Music Royalty Obligations.

Does the decision cover broadcasters who stream on the Internet? Yes, the decision does cover the Internet transmissions of the over-the-air content of broadcast stations. Continue Reading Copyright Royalty Board Decision on Music Royalties – Clarifying the Confusion

Last Monday, briefs were filed by the parties addressing the motions seeking rehearing of the Copyright Royalty Board’s decision to dramatically raise the royalty rates paid for the use of a sound recording on an Internet radio station.  In its briefs opposing each of the webcasters’ rehearing motions, SoundExchange took a very aggressive position challenging the very right of the webcasters to raise their rehearing points.  Following the filing, SoundExchange issued another press release, quoting its President John Simson, "just because you don’ like the outcome of a fairly played game doesn’t mean that you should ask the referee to order the game to be replayed."  In fact, what the webcasters are really doing is asking for an instant replay review of an alleged winning touchdown.  Webcasters are arguing that the "officials" were mistaken in their initial determination, including arguments that the principal basis of the CRB decision, reliance on a SoundExchange expert witness who derived a model for determining what the royalties for noninteractive Internet radio should be based on what parties pay for music use in the interactive marketplace, was a fundamentally flawed model contradicted by one of SoundExchange’s own expert witnesses in the satellite radio royalty proceeding which is currently underway. 

SoundExchange spent much of its briefs challenging the right of the webcasters to raise their arguments – claiming that the webcasters should have raised their arguments at an earlier stage of the proceeding, that the webcasters’ arguments lacked supporting evidence, and even suggesting that the Broadcasters had breached the "protective order" in the satellite radio proceeding against the use of confidential material when the Broadcasters offered the evidence of the conflicting expert in the satellite radio proceeding.  Each of the webcasting parties amplified their arguments about various aspects of the decision – small webcasters suggesting that the Board should have recognized an "opt-in" category of webcasters who would pay royalties based on a percentage of their total revenue (avoiding many of the issues that the Board found with trying to compute a percentage of revenue for an entity that had multiple business lines), all webcasters challenging the $500 minimum fee per channel, and each arguing that there needed to be an aggregate tuning hour metric on which to compute royalties.  And, as set forth above, most interestingly, there was a fundamental issue raised by the Broadcasters, who discovered that a witness presented by SoundExchange in the CRB proceeding involving the royalties for satellite radio contradicted the premises of the SoundExchange expert in this proceeding on which the Board placed its greatest reliance in reaching its decision.

Continue Reading Briefs Filed With Copyright Royalty Board on Internet Radio Royalty Rehearing – SoundExchange Cries Foul