Broadcast Performance Royalty

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The Copyright Royalty Board yesterday published in the Federal Register the proposed rates for the public performance of musical compositions by noncommercial broadcasters for the period 2023 through 2027.  The rates reflect settlements between ASCAP, BMI, SESAC and GMR with various organizations representing noncommercial broadcasters. The Corporation for Public Broadcasting agreed to one set of rates paid to cover NPR and PBS affiliates. The NRB (the religious broadcasters’ organization) has a Noncommercial Music License Committee that agreed to another set of rates that apply to non-NPR radio stations not owned by colleges and universities, setting out rates that these noncommercial stations pay to each of these rights collection agencies. For these radio stations, the rates are based on the population served by each noncommercial station. College and university-owned stations can take advantage of a third set of rates, based primarily on the number of students in the school with which the station is affiliated.  Comments and objections, if any, to these proposed rates are due on or before February 27, 2023.

Commercial broadcasters have royalty rates that are to be paid to these performing rights organizations (or “PROs”) set not through the Copyright Royalty Board but instead through varying processes.  ASCAP and BMI are subject to antitrust consent decrees (see our articles here and here on arguments about those decrees).  The decrees provide that, if the PRO cannot reach an agreement with representatives of the commercial radio industry (usually the Radio Music License Committee – see our article on RMLC here – although commercial religious broadcasters also negotiate rates with these entities through the NRB), a US District Court judge in New York will hold a trial, acting as a “rate court” to determine the amount for reasonable rates.  ASCAP and BMI are currently negotiating with the RMLC on new rates for commercial broadcasters.  SESAC is also subject to antitrust settlements with both the RMLC and the TV Music License Committee.  If SESAC and the committees cannot reach agreements, an arbitration panel sets the rates (see our articles here and here on radio rates set as a result of this process).  After prolonged litigation with GMR to have their rates reviewed in some manner, the RMLC last year dropped its lawsuit seeking that relief and GMR now has no oversight as to the rates it charges (see our article on the GMR license that resulted).  Noncommercial broadcasting, however, under Section 118 of the Copyright Act, has its PRO obligations set by the Copyright Royalty Board and, like this year, the result is almost always a settlement between the parties (even though, theoretically, the Board could hold hearings to set the rates if the parties had not agreed to the rates). Continue Reading CRB Releases Proposed ASCAP, BMI, SESAC and GMR Rates for Noncommercial Broadcasters

Royalties paid for the use of music by broadcasters and digital media companies, and other issues about music rights, can be an incredibly dense subject, with nuances that can be overlooked.  I participated in a CLE webinar earlier this week, sponsored by the Federal Communications Bar Association, where we tried to demystify some of the issues in music licensing (see description here).  I moderated a panel on the Hot Topics in Music Licensing, talking about the broadcast performance royalty, the appeal of the webcasting royalty decision, issues about the proliferation of performing rights organizations seeking royalties for the public performance of musical compositions, and more theoretical issues about the entire process of clearing music for use by broadcasters and other businesses.  To highlight some of the issues, and some of the tensions in the world of music royalties, I put together the attached article.  Hopefully, it provides some context on the relationship between some of these hot topics, and gives some food for thought as to how these issues can be addressed. 

As 2023 begins, our “Hot Topics” panel will look at some of the current legal and policy issues in music licensing that may be relevant to the communications industry.  Most of the issues we will discuss are ones that have been debated, in one form or another, in copyright circles for decades.  But, as copyright can be so complicated with many stakeholders with differing interests, the chances of any final resolution to any of these issues may well be small.  This article is meant to put some of those debates in context, as many of the specific issues, in one way or another, are intertwined. 

The issue that likely will be the most contentious this year (and has been for decades) is the continuing effort of the recording industry to establish a public performance right in sound recordings that would apply to non-digital performances.  For over 25 years, recording artists and the record labels (which usually hold the copyrights to popular recordings) have had a right to a performance royalty for digital performances.  Broadcasters who stream an online simulcast of their programming, along with webcasters and others who make non-interactive digital transmissions, must pay a performance royalty, generally to SoundExchange.  The rates to be paid are set by the Copyright Royalty Board.  But in the US, over-the-air broadcasters, restaurants, bars, clubs, retail establishments, and others who publicly perform music pay only for the performance of the musical compositions (the “musical work”), not for the performance of the song as recorded by a particular artist (the “sound recording”).  That has been a point of contention for a century, almost from the moment when recorded music first appeared, but the issue has become particularly heated in the last two decades, once the sound recording public performance right was established after being mandated by copyright legislation in the late 1990s.Continue Reading  An Overview of the Hot Policy Topics in Music Licensing

Here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The FCC has sent an e-mail, apparently to all broadcasters, regarding the cybersecurity of broadcast stations that use the DASDEC

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On Wednesday, the House Judiciary Committee will be holding a “mark-up session” (see this notice of the session) where they will be considering the American Music Fairness Act which proposes to impose a sound recording performance royalty on over-the-air broadcasting.  This would be a royalty paid to SoundExchange to benefit the recording artist and copyright holder (usually the record company) and would be in addition to the royalties already paid to composers and publishing companies through royalties paid to ASCAP, BMI, SESAC and GMR.  A mark-up session considers amendments to the bill and could lead to the committee’s approval of the bill.  If approved by the Committee, the bill would still need to be approved by the full House of Representatives and the Senate (and signed by the President) before it became law.  With the current session of Congress coming to a close at the end of the month, the proposed legislation would need to start over in the Congress.  Thus, unless the bill is tacked on to some must-pass legislation in this “lame duck” session of Congress, any action this week by the committee will likely simply be a marker for action in the new year.

The NAB has already issued a statement about the session, pointing out that a majority of the House members have signed on to the Local Radio Freedom Act stating that they will not vote for this legislation.  The statement also reiterates the NAB’s interest in working on a “mutually beneficial solution” to the issue of the broadcast performance royalty (an interest in a possible solution we wrote about here).  Nevertheless, with this issue back on the table, even if only in a symbolic way, we thought that we should re-post our summary of the American Music Fairness Act and the issues that it raises that we wrote last year, when the legislation was first introduced.
Continue Reading House of Representatives Judiciary Committee to Consider American Music Fairness Act Proposing Sound Recording Performance Royalty on Over-the-Air Broadcasting

Global Music Rights (GMR) has sued three radio groups for allegedly playing GMR catalog songs but not paying the associated public performance royalties to GMR.  As we have written many times, GMR is a performing rights organization (a “PRO”) representing what they term in the complaints filed against these companies “an elite roster of just over 100 songwriters.” The complaints specifically note that the songwriters include Bruce Springsteen, Bruno Mars, Drake, Pharrell Williams, John Lennon, and The Eagles.  The full list of songwriters and songs represented by GMR is available on their website here.  As these songwriters are no longer represented by ASCAP, BMI or SESAC, for a company to publicly perform any of these songwriters’ music, they either need a license from GMR or they need to directly license the music from the songwriters or their agents (or fit into one of the limited exemptions that we wrote about here, exceptions that would typically not cover commercial radio broadcasting).

The lawsuits seek $150,000 for each copyrighted work that was allegedly infringed – the maximum set out by the Copyright Act for “statutory damages,” i.e., damages that can be collected even without providing evidence of actual harm caused by the alleged copyright infringement. The allegations against one of the companies suggest that the company played over 100 GMR compositions more than 20,000 times without obtaining a license.  While courts have discretion to order far lower statutory damages than those being sought here, even the threat of such damages has been enough to put many of the original file-sharing music sites out of business. Of course, in this case, these damages are being sought not from some company that provides unauthorized, unlimited downloads of copyrighted music, but from radio companies that presumably are already paying other performing rights organizations for the use of music.
Continue Reading Lawsuits Filed Against Three Radio Companies Alleging That They are Playing Global Music Rights Songwriters Without a License – Background for the GMR Claims  

A new Chief Copyright Royalty Judge of the Copyright Royalty Board has just been named by the Librarian of Congress.  According to the Press Release announcing his appointment, David Shaw will fill that position after having previously served as an administrative law judge on the International Trade Commission for over 10 years.  There, he heard complex cases dealing with detailed financial matters – experience that sounds relevant to the kinds of cases he will be deciding on the CRB.  The Copyright Royalty Judges decide cases determining the marketplace value of music when  setting royalty rates, and that look at the relative value of programming when deciding the distribution of cable royalties to program copyright holders.  In addition to ITC experience, Shaw was a judge at the Social Security Administration and, according to his biography, worked in the General Counsel’s office at NPR early in his career.  With the appointment of this new Chief Judge, we thought that it would be worth looking at some of the specific areas in which the CRB makes decisions that affect media companies.

The CRB is principally charged with rates and distributions for copyrights governed by a “statutory licenses.”  A statutory license is created by Congress when it is believed that individual negotiations between copyright holders and copyright users would either be unduly complex so as to be almost unworkable or where an efficient market would not otherwise exist.  Essentially, the statutory license means that the copyright owner must license the work that they own – they cannot restrict its use – if the user pays the royalties set by law or established by the CRB and abides by the conditions for use set out in the law.  See our article here about music statutory licenses and our articles here and here on some of the issues with the TV statutory licenses.  The conditions of use are often carefully restricted so as to only cover very specific uses under the statutory license (see our article here on the conditions placed on the use of music under the statutory license for webcasting – the public performance right for sound recordings used by noninteractive services discussed below).Continue Reading New Copyright Royalty Board Chief Judge Named – Looking at the Issues Considered by the CRB of Importance to Media Companies

Here are some of the regulatory developments of significance to broadcasters from the past  week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The US Court of Appeals this week determined that the FCC’s requirement that broadcasters confirm by searching DOJ and FCC

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In recent months, lawsuits have been filed against streaming audio service Pandora by comedian Lewis Black, the estate of Robin Williams, and representatives of other comedians seeking public performance royalties for the underlying comedic work – not the recording of the comedy bit for which a royalty is already paid, but instead for the script of that comedic performance.  Reportedly, Spotify has pulled comedy recordings from its service to avoid such threats.  What is the issue here?  The claim in the lawsuits is that the authors of the script of any comedy bit have the right to control the performance of their works in the same way that composers of a song control the rights to use that song.  The argument is that, if these services are playing these comedy bits through a digital audio performance, not only do the comedians who are recorded performing such bits deserve a royalty, but a separate royalty should also be paid to those who wrote it.

In these lawsuits, the analogy is made to the copyrights for the performance of a song.  For music streamed by any digital audio company, there are two royalties that must be paid.  The composers of the music are paid for the performance of their work (both in the digital and analog worlds).  These payments are usually made through a performing rights organization (a “PRO”) which represents thousands (or sometimes millions) of composers and their publishing companies.  ASCAP, BMI and SESAC are the traditional PROs who, for radio and television, all have their rates reviewed for fairness under antitrust laws.  As we have written (see for instance our articles here and here), a new PRO for musical works, GMR, has recently settled litigation with the Radio Music License Committee and is assessing most commercial radio stations a royalty for the performance of music by the composers that it represents.  For digital performances, a royalty is also owned for the performance of the sound recording – the composition as recorded by a singer or band.  Through an act of Congress, all noninteractive digital performances (see our article here on the difference between interactive and noninteractive services) can be played by a digital music service by paying a “collective” that acts like a PRO by collecting royalties from those services that transmit the music to their listeners and distributing those royalties  to the performers and their record labels (as the labels usually own the copyright in the recording).  Since the sound recording digital performance royalty was first collected about two decades ago, SoundExchange has served as the “collective.”  The lawsuits by the comedians seek to collect these dual royalties from digital services that transmit comedy recordings to their listeners.  Why is this not covered by the royalties that services already pay?
Continue Reading Public Performance Royalties for Comedy Recordings? – New PROs Claim that Additional Royalties Are Due

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • Comment dates have been announced in the Federal Register for the FCC’s Notice of Proposed Rulemaking proposing to authorize LPTV

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Here are some of the regulatory developments of significance to broadcasters from the last week, and two important deadlines in the week ahead, with links to where you can go to find more information as to how these actions may affect your operations.

  • The FCC Enforcement Bureau this week announced its latest round of random

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