We’ve written many times about the perils of posting a photo on your website without getting permission from the photo’s owner (see, for instance, our articles here and here).  Copyright protects photos, even when they are shared on the Internet.  Just by posting a photo to some website does not mean that the owner has given up its copyright protections – and just because you can easily right-click on the image and paste it on your website doesn’t mean it is legal to do so. If you copy a photo for use on your site without permission, you should not be surprised to see a copyright infringement claim seeking damages – potentially big damages.  To avoid issues, many website owners look for ways to get permission to use photos, signing up for subscriptions from stock photo services or, often when trying to save money, relying on photos made available through some “creative commons” license.  However, relying on the creative commons license can be perilous.  One example is a recent US District Court ruling on a motion for summary judgment of a copyright lawsuit brought by a photographer when his photos of Willie Nelson and Carlos Santana appeared on a news website to illustrate articles on the musicians.  Anyone with a website should read this decision, as it addresses in detail not only the issues with these creative commons licenses, but also many of the other legal issues that arise in lawsuits about the unauthorized use of photos.

In this case, a local news website had used photos that were freely available on a creative commons site and were widely circulated on other sites.  But when they were posted to the defendant’s site, there was allegedly no attribution of the photos to the photographer and no link to the photographer’s own site, which were preconditions to the creative commons license.  Because the defendant did not follow the terms of license, the court found that the license was not effective.  The fact that these photos were otherwise widely available on the Internet similarly provided no defense to the infringement claim.  Relying on a creative commons license without scrupulous attention to any license requirements can lead to legal actions like the one brought here. In fact, the decision suggested that this was not the first lawsuit brought by this photographer, and as we’ve seen in past cases, there is no shortage of other photographers ready to make claims against those who use their work without an effective license.
Continue Reading Using Photos on Your Website – Court Decision Highlights Problems with a Creative Commons License and Other Copyright Issues

Last week, Congressmen Ted Deutch (D-FL) and Darrell Issa (R-CA) introduced the American Music Fairness Act ( see their Press Release for more details) which would impose a new music royalty on over-the-air radio stations.  The royalty would be payable to SoundExchange for the public performance of sound recordings.  This means that the money collected would be paid to performing artists and record labels for the use of their recording of a song.  This new royalty would be in addition to the royalties paid by radio stations to composers and publishing companies through ASCAP, BMI, SESAC and GMR, which are paid for the performance of the musical composition – the words and music to a song. The new legislation is another in a string of similar bills introduced in Congress over the last decade.  See, for instance, our articles here, here, here and here on previous attempts to impose such a royalty.

Each time this idea is introduced, it has a slightly different angle.  In an attempt to rebut arguments that this royalty would impose an unreasonable financial burden on small broadcasters, the new bill proposes relatively low flat fees on small commercial and noncommercial radio stations, while the rates applicable to all other broadcasters would be determined by the Copyright Royalty Board – the same judges who recently released their decision to increase the royalties payable to SoundExchange by webcasters, including broadcasters for their internet simulcasts.  Under the bill, the CRB would review rates every 5 years, just as they do for webcasting royalty rates.
Continue Reading New Legislation to Impose Sound Recording Performance Royalty on Over-the-Air Radio – What Does It Provide and What Would the Royalty Cost?

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.

  • Congressmen Ted Deutch (D-FL) and Darrell Issa (R-CA) introduced the American Music Fairness Act which would impose a royalty payable

The Copyright Royalty Board (CRB) on Friday released the rates and terms for webcasting royalties for 2021-2025, and the rates are going up.  While the full decision explaining the reasoning for the rate increases will not be released to the public until the parties to the case have the opportunity to seek redaction of private business information, the rates and terms themselves were released and can be found here.  These new rules apply to all noninteractive webcasters including broadcasters who are simulcasting their over-the-air signals on the Internet.  As detailed below, both the per-performance and annual minimum fees will be increasing for both commercial and nonprofit webcasters.

The per-performance royalty increases to $.0021 for non-subscription streams, up from the current $.0018.  For subscription streams, the fee increases to $.0026 per performance from $.0023.  A performance is one song played to one listener.  So, if a streaming service plays one song that is heard by 100 listeners, that is 100 performances.
Continue Reading Webcasting Royalties Going Up – Copyright Royalty Board Releases Rates and Terms for 2021-2025

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.

  • The Copyright Royalty Board (CRB) released its long-awaited decision on streaming royalties for 2021-2025, finding that the rates applicable to

We are celebrating our birthday.  Last week marked 15 years since the first short articles were published on this blog, with an official welcome being posted once we decided that we really could find something to regularly write about – that welcome posted 15 years ago Friday.  Here we are, a decade and a half and almost 2,500 articles later, and there still is no shortage of topics to cover.

In the 15 years that the blog has been active, our audience has grown dramatically.  In fact, I’m amazed by all the different groups of readers – broadcasters and employees of digital media companies, attorneys and members of the financial community, journalists, regulators, and even students and teachers.  Because of all the encouragement that I have received, I’ve kept going, hopefully providing you all with some valuable information along the way.  If you are interested, I recently discussed the blog with the LexBlog’s This Week in Legal Blogging (the video can be accessed here), telling many stories about unusual interactions with readers of our articles.
Continue Reading Celebrating 15 Years of the Broadcast Law Blog

The trade press in the last few days has been full of news about a letter of inquiry from two Congressmen to Spotify asking for details about Spotify’s promotional royalty rates where, in exchange for lowered royalties, songs to which these rates apply may be played more frequently, as Spotify factors in lower costs into its music selection algorithms.  The Congressional letter asks whether this promotional approach is already in operation, and if it will lead to a “race to the bottom” forcing lower royalties on artists, resulting in economic losses to these artists.  While the implication is that negotiation over royalty rates is a new phenomenon, in fact such negotiations are common in the digital music marketplace and, based on the way that Congress itself established the royalties for music services, they are inherent in that system.  In effect, this Congressional letter seems to be asking for Spotify to forego a private business transaction by which it lowers its costs of doing business through providing its business partners something that they want – more exposure for certain music.

Indeed, as we have written before, these negotiations over royalty rates are required to operate in the digital music marketplace.  Royalties paid to performers and record labels for the use of music by an interactive music service like Spotify are not set by governmental decision (there is no Copyright Royalty Board setting a default rate as there is for noninteractive music services – see our article here).  Instead, the rates are set by private business negotiations where there is a give-and-take between the parties over various considerations – including the promotional benefits when songs are featured on certain playlists provided by services like Spotify.  Certainly, there are counterweights to any downward pressure on all royalty rates, as listeners to an on-demand service like Spotify want to hear the hits.  So Spotify needs to pay for those hits to attract and retain its listeners.  In some cases, artists have determined that there is insufficient promotional value to the playing of their music on an interactive service and that no royalty would be enough to compensate them for perceived lost sales of their music when it is featured on an interactive service.  As we wrote here, these artists may deny an interactive service the use of all their music, or portions of their catalog.  In other cases, as in the instances that apparently gave rise to the Congressional letter, record companies or artists may feel that it is important that their music get exposure, so they will be willing to accept lower royalties in exchange for wider exposure to their music to consumers that such plays deliver.  In other cases, other promotional benefits may be given to the copyright holders for lower royalties (in fact, initially, the record companies received equity positions in Spotify, presumably to help convince them to make their music available at rates that Spotify thought it could afford).  Royalties in the interactive music marketplace are simply the result of a marketplace negotiation, as Congress intended when they adopted Section 114 of the Copyright Act providing for digital performance rights for sound recordings.
Continue Reading Congress Asks Spotify for Information About Promotional Royalty Rates – Is This Much Ado About the Way the Interactive Music Marketplace is Designed to Work?

As the calendar flips to June, pandemic restrictions across the country continue to loosen, and we inch closer to summer.  Broadcasters could be forgiven for not having regulatory dates and deadlines on the top of their minds.  There are, however, many important dates and deadlines to keep track of during June – we provide details of some of them below.  As always, be sure to stay in touch with your FCC counsel for the dates and deadlines applicable to your operations.

Radio stations in ArizonaIdahoNevadaNew MexicoUtah, and Wyoming and television stations in Michigan and Ohio should be putting the final touches on their license renewal applications, which are due by June 1.  See our article, here, about preparing for license renewal.  These stations must also file with the FCC a Broadcast EEO Program Report (Form 2100, Schedule 396) and, if they are part of a station employment unit (a station or a group of commonly owned stations in the same market that share at least one employee) with 5 or more full-time employees, upload to their public file and post on their station website a link to their Annual EEO Public Inspection File report covering their hiring and employment outreach activities for the twelve months from June 1, 2020 to May 31, 2021.
Continue Reading June Regulatory Dates for Broadcasters: License Renewal and EEO Filings, Comments and Replies, Auction Upfront Payments, Streaming Rates Announcement, and More

The Copyright Royalty Board decision on the rates to be paid in the next 5 years by webcasters, including broadcasters who simulcast their programming on the internet, to SoundExchange for the digital public performance of sound recordings is supposed to be released by June 14.  These royalties are collected by SoundExchange from noninteractive webcasters (see our articles here, here and here on the difference between interactive and non-interactive webcasters) and are distributed to the artists who perform on recordings and to the copyright holders of those recordings – usually the record labels.  The CRB sets these rates in 5-year increments.  The rates at issue in the current proceeding are for 2021-2025.  As we wrote here and here, these rates would normally have been determined before the end of the last rate period at the end of 2020 but, as the trial to determine the rates was postponed by the pandemic, the CRB has been given to June 14 to announce the new royalties, presumably to be made retroactive to January 1.

The proposals made in this proceeding vary widely.  SoundExchange and its associated record labels are arguing that the rates should substantially increase, from their current level of $.0018 per performance (per song per listener – see our article here) for nonsubscription streams to rates of $.0028 per performance for 2021, with cost of living increases each succeeding year.  For subscription webcasting, SoundExchange proposes that the rates increase from $.0024 to $.0031.  In these cases, each party makes arguments as to what a willing buyer and willing seller would pay in a marketplace transaction for such rights.  The parties introduce expert witnesses to testify as to what that rate would be, usually by looking at other similar marketplace transactions.  To arrive at its proposed rates, SoundExchange introduced experts who looked at the market price for the use of music by interactive services.  These prices are set by direct negotiations.  From those prices, the experts attempted to calculate an appropriate adjustment to remove the value of the interactivity to determine the rates that a noninteractive service would pay.  This proposed increase in royalties was, of course, countered by representatives of the services who will pay the royalties to SoundExchange.
Continue Reading Copyright Royalty Board Decision on Webcasting Royalties Expected by June 14 – What Will the Streaming Rates for 2021-2025 Be?

Last week, the NY Times ran an interesting article, here, about how many old TV programs now available on streaming services are missing music that was featured on the original broadcast.  This was because when the music rights were initially purchased,  their use was limited to over-the-air broadcasts or was limited to a short period of time, with the producers never envisioning that the programs would be available through on-demand streaming services decades after they originally aired on over-the-air television.  While not mentioned in the article, for many radio broadcasters one of the series most missed on streaming services is the industry favorite WKRP in Cincinnati.  That series took forever to get to digital outlets, and still does not appear to be on any subscription streaming service, reportedly because of music rights issues.  This article and the issues that it highlights should be a warning not just to TV producers, but also to anyone planning to use music in audio or video productions – including podcasts and online videos – that clearing music rights is essential to insure that these productions can be fully exploited  not only when they are first made available, but also in the future if they are repurposed for other platforms.

We have written before (see, for example, our articles here and here) about the need to get permission from the copyright holders in both the musical work (or musical composition – the words and music to a song) and in the sound recording (or master recording – the song as recorded by a particular band or singer).  Just signing up with a performing rights organization (ASCAP, BMI, SESAC or GMR) is not enough because, while podcasts may involve the public performances of the musical works that these organizations license, they do not give rights to make the permanent fixed copies of those songs, synchronized with other audio in the podcast, that can be accessed and downloaded on demand.  These uses require the additional copyrights to reproduce and distribute music, and arguably to make derivative works, that can only be obtained from the copyright holder (see our article here describing why the PRO license itself does not give all rights needed to use music in podcasts).   Similarly, the rights to the sound recording must also be obtained from the copyright holder in the recording – and payments to SoundExchange do not cover the on-demand music uses involved in a podcast.  Thus, when the necessary rights are not obtained from the copyright holders, we have seen podcasts go silent after infringement claims are brought or threatened (see our article here).
Continue Reading Missing Music On Streamed TV Programs Highlights Rights Issues for Podcasters and Video Producers