Early this month, the Copyright Royalty Board announced that it will be starting a new proceeding to set the royalty rates to be paid by “business establishment services” for the rights to make ephemeral copies of sound recordings. The rates will apply for the period 2019-2023. Interested parties must file a Petition to Participate by February 2, along with a statement of their interest in the proceeding, and a check for $150 to cover filing fees. Details on the filing requirements are set out in the CRB’s Notice.
As we have written before, the “business establishment service” is different from most other CRB royalty proceedings. The parties subject to the royalty are the service providers who package music programming to be played by businesses and distribute that programming to these establishments like bars, restaurants, and retail stores. The establishments themselves have no obligation to pay a public performance fee for the sounds recordings played at their businesses (though they do have to pay for the underlying musical composition – the words and music – to performing rights organizations like ASCAP and BMI – see our articles here and here). But the services who package this programming and make temporary copies of the sound recordings in order to transmit that programming to their retail customers, are deemed to owe a royalty for the “ephemeral copies” that they make. In the past, these CRB cases have usually settled, establishing a percentage of revenue royalty with a fairly large upfront minimum fee (see our article here on the last settlement setting the rates at 12.5% of revenue with a minimum fee of $10,000). Parties who file to participate in this upcoming proceeding will be able to engage in settlement discussions over the new royalty or, if those discussions are not productive, to participate in the hearings that the CRB will hold in order to set the rates.