A decision was expected in December on the royalties to be paid by broadcasters and other digital media companies who stream their non-interactive audio programming on the Internet. As we wrote at the beginning of the pandemic, the Copyright Royalty Board, which hears the arguments about the royalties to be paid to SoundExchange in a trial-type administrative hearing, had to postpone the hearing that was initially slated to begin in March. That hearing will now begin later this month. Because of the delays in the hearing caused by the pandemic, Congress authorized the Copyright Office to extend various statutory deadlines. This week, the Copyright Office announced that the December deadline for a decision on webcasting royalties has been pushed until April 15, 2021.
This does not mean that the royalties themselves will not go into effect on January 1. The current CRB proceeding is to determine the rates that will be in effect for 2021 through 2025. The proceeding began early in 2019 (see our posts here and here). The January 1 effective date for the new royalties remains in place, so any decision released later in 2021 will be retroactive. In January, webcasters and other internet radio operators will pay the royalties currently in place, and there will be some mechanism for a true up of the amounts due once the decision becomes effective. That is not unusual in the music royalty world. Just a few months ago, the Radio Music License Committee reached an agreement with BMI on royalties that was retroactive several years. The Copyright Royalty Board decisions themselves, even if released to the parties in December, are often not final until the next year as the public version of any CRB decision usually takes time to release, and the parties have time after a decision is released to seek edits to the decision. The Copyright Office itself also reviews the CRB decision for legal errors. Even after that, the decision can be appealed to the Courts, so the ultimate resolution may be unknown for years – yet parties conduct their business while waiting to see if any adjustments to fees already paid may be due at some later time.
This proceeding moves forward as most of these cases do – with SoundExchange asking for a substantial increase in the royalties and the webcasting community, including broadcasters, Google, and Sirius XM (including Pandora) asking for decreases. The big difference is that this year, the trial will be held virtually on an electronic platform rather than in a courtroom in Washington DC (where the Copyright Office is still closed to the public). The pleadings in the case, including the rate proposals, are available for review on the CRB’s website, though confidential business information is redacted in the public documents to preserve the business secrets of the parties in the case. That confidential information is available only to the Judges and the attorneys and expert witnesses in the case. Watch for the Judges’ decision in April of next year to see if the rates for January 2021 through December of 2025 will change – and, if so, which way they will go.