Intellectual Property

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Last week, we wrote about legal issues for podcasters, and made the point that media companies should be making clear by contract or otherwise who owns the podcasts that their employees and independent contractors have created. This week, there was press coverage (see, for instance, the article here) about a law suit…

Last week, I spoke at Podcast Movement 2018 – a large conference of podcasters held in Philadelphia. My presentation, Legal Issues In Podcasting – What Broadcasters Need to Know, was part of the Broadcasters Meet Podcasters Track. The slides from my presentation are available here. In the presentation, I discussed copyright issues, including some of the music rights issues discussed in my articles here and here, making clear that broadcaster’s current music licenses from ASCAP, BMI, SESAC and even SoundExchange don’t provide them the rights to use music in podcasts. Instead, those rights need to be cleared directly with the holders of the copyrights in both the underlying musical compositions as well as in any sound recording of the song used in the podcast.

I also discussed how, when podcasters are delivering advertising messages, they need to make clear that the messages are sponsored. We have written about the FTC’s requirements that when someone is paid to promote a product online, they need to disclose that the promotion was sponsored. See our articles here and here. Also discussed, and covered in the slides, were issues about defamation and invasion of privacy (and how concerns like these can become more serious in a podcast than in a broadcast as a broadcast is ephemeral – once the broadcast is over, it is gone – but a podcast tends to be permanent, providing evidence of any content that may be of legal concern). I also touched on privacy and security issues. One topic not covered in the slides, but suggested to me by a podcaster at a reception earlier at the conference, was the question of who owns the podcast.
Continue Reading A Presentation on Legal Issues for Podcasters – Who Owns What?

Next Wednesday, July 25, I will be speaking at the Podcast Movement Conference in Philadelphia, as part of the Broadcasters Meet Podcasters Track, discussing legal issues that broadcasters need to consider as they move some of their content into podcasts. One of the topics that I will be discussing will be the music royalty obligations of podcasters who use music in their programs. A month ago, we wrote about how broadcasters’ streaming royalties are affected by smart speakers like the Amazon Alexa and Google Home, as these speakers play the digital streams of a radio station’s programs where SoundExchange royalties must be paid, as opposed to the over-the-air signal of the station, where no such royalties are owed. These smart speakers may have an impact on podcasters royalties, affecting who needs to be paid in connection with the use of music in podcasts.

When I initially started to write about issues of music use in podcasts, my emphasis was on the need to secure direct licenses from performers and composers (or their record companies and publishing companies) for the rights to make reproductions and distributions of music in podcasts. When digital content is downloaded, it triggers rights under copyright law implicating the reproduction and distribution rights of copyright holders (see our article here), as opposed to their public performance rights – the rights with which broadcasters are most familiar as those are the rights that they obtain when paying Performing Rights Organizations ASCAP, BMI, SESAC and GMR in connection with their over-the-air broadcasts and those PROs plus SoundExchange in connection with noninteractive digital streaming. When podcasts were something that were downloaded, just like the purchase of a download of a song from the iTunes music store, it was the reproduction and distribution rights that were triggered, and conventional wisdom was that the PROs had no role to play in the licensing of downloaded media. As technology has changed, the analysis of what rights you need to use music in podcasts may well be changing too. The direct licensing of music for your podcast is still needed – but a public performance right may well also be necessary.
Continue Reading Hey, Alexa, How Are Your Affecting My Podcasting Music Royalty Obligations?

In the last year, the popularity of Alexa, Google Home and similar “smart speaker” devices has led to discussions at almost every broadcast conference of how radio broadcasters should embrace the technology as the new way for listeners to access radio programming in their homes. Broadcasters are urged to adopt strategies to take advantage of the technology to keep listeners listening to their radio stations through these new devices. Obviously, broadcasters want their content where the listeners are, and they have to take advantage of new platforms like the smart speaker. But in doing so, they also need to be cognizant that the technology imposes new costs on their operations – in particular increased fees payable to SoundExchange.

Never mentioned at these broadcast conferences that urge broadcasters to take advantage of these smart speakers is the fact that these speakers, when asked to play a radio station, end up playing that station’s stream, not its over-the-air signal. For the most part, these devices are not equipped with FM chips or any other technology to receive over-the-air signals. So, when you ask Alexa or Google to play your station, you are calling up a digital stream, and each digital stream gives rise to the same royalties to SoundExchange that a station pays for its webcast stream on its app or through a platform like TuneIn or the iHeartRadio. For 2018, those royalties are $.0018 per song per listener (see our article here). In other words, for each song you play, you pay SoundExchange about one-fifth of a cent for each listener who hears it. These royalties are in addition to the royalties paid to ASCAP, BMI, SESAC and, for most commercial stations, GMR.
Continue Reading Hey, Alexa, How Much Did You Raise My SoundExchange Royalties?

In 10 days, we’ll mark the 12th anniversary of my first post welcoming readers to this Blog.  I’d like to thank all of you who read the blog, and the many of you who have had nice words to say about its contents over the years.  In the dozen 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 many students and educators. Because of all the encouragement that I have received from readers, I keep going, hopefully providing you all with some valuable information along the way.

I want to thank those who have supported me in being able to bring this blog to you.  My old firm, Davis Wright Tremaine LLP helped me get this started (and graciously allowed me to take the blog with me when I moved to my current firm six years ago).  My current firm, Wilkinson Barker Knauer LLP, has also been very supportive, and I particularly want to thank several attorneys at the firm (especially David O’Connor and Kelly Donohue) who help catch, on short notice, my typos and slips in analysis for articles that I usually get around to finishing shortly before my publication deadline.  Also, a number of other attorneys at the firm including Mitch Stabbe, Aaron Burstein, Bob Kirk and Josh Bercu have contributed articles, and I hope that they will continue with their valuable contributions in the future.  Thanks, also, to my friendly competitors at the other law firms that have taken up publishing blogs on communications and media legal issues since I launched mine – you all do a great job with your own take on the issues, and you inspire me to try to keep up with you all. 
Continue Reading 12 Years of the Broadcast Law Blog – Where We Have Been and What We Are Looking at Next

While Copyright Royalty Board decisions on royalties for webcasters, Sirius XM and mechanical royalties get most of the attention, the CRB also sets rates paid by “business establishment services” for the “ephemeral copies” made in their music businesses. Business establishment services are the companies that provide music to businesses to play in retail stores, restaurants and other commercial establishments. These services have come a long way from the elevator music that once was so derided – and now set the mood in all sorts of businesses with formats as varied as the commercial businesses themselves.  While the rates paid by these services pay for music rights is a little off-topic for this blog, these rates are a bit unusual, so they are worth mentioning.  The Copyright Royalty Board just announced a proposed settlement between the services that were participating in the CRB case and SoundExchange which will raise the rates gradually from the current 12.5% of revenue to 13.5% over the next 5 years, with a minimum annual fee of $20,000, up from $10,000. These rates, which apply to any company that does not negotiate direct royalties with the sound recording copyright holders, go into effect in 2019 and will be in place through 2023. Comments on these proposed rates are due June 18, though CRB rules limit the consideration of comments from those who were not participants in the proceeding.

We have written about the rates paid by these services before (see for instance our articles here, here and here).  What makes them unusual is that the royalties are not paid to SoundExchange for the public performance of sound recordings, as are the royalties paid by other digital music services including webcasters (here and here) or Sirius XM.  That is because, in adopting Section 114 of the Copyright Act, Congress did not want to impose on businesses a new performance right, as there is no general public performance right in sound recordings in the United States.  Businesses and other services that do not digitally transmit performances of audio recordings have no obligation to pay copyright holders in the sound recordings (usually the record companies) or artists for the public performance of music.  Users do, however, pay fees for the public performance of the underlying composition through ASCAP, BMI and SESAC and GMR.  As we wrote here, the Register of Copyrights has suggested that a general public performance right in sound recordings be paid in the United States. But that would impose new fees on all businesses that use recorded music in the US, from stadiums playing “We Will Rock You” at the appropriate point in a big game, to DJs spinning their discs in nightclubs, to the trendy tunes playing in the hip clothing retail stores, to over-the-air radio. This proposal is therefore very controversial.  So, if they are not paying public performance fees, why do background music services have to pay SoundExchange?
Continue Reading Copyright Royalty Board Announces Proposed New SoundExchange Royalties for Business Establishment Services

Last week, the Radio Music License Committee (RMLC), the organization representing most commercial radio broadcasters in negotiating performance royalties for musical compositions, initiated a proceeding in US District Court in the Southern District of New York against BMI.  This action raises short-term issues as to what this particular lawsuit means for the radio industry, and it also highlights longer term issues that may arise through legislative and regulatory changes that may affect these cases like this one in the future.

As we have written many times (see e.g here and here), BMI is subject to antitrust consent decrees governing its activities – including the rates that it charges to companies wanting to use the music that it licenses.  When BMI and a user cannot agree on the terms of the license, either party can initiate a proceeding in court for the court to determine what reasonable rates are for the use proposed.  These actions are all brought in the Southern District of New York where a specific judge is assigned to hear BMI disputes.  This proceeding is referred to as a “rate court” proceeding where the parties will present evidence as to what each believes to be a reasonable rate – with the judge making the decision, subject to review by the Second Circuit Court of Appeals.  What issues brought BMI and RMLC to Court?
Continue Reading RMLC Initiates Rate Court Proceeding with BMI to Set Radio Royalties – What Does It Mean?

The week before last, we summarized the provisions of the Music Modernization Act as passed by the House of Representatives. The Senate is now poised to take up this legislation in a hearing scheduled by the Senate Judiciary Committee for next Tuesday, May 15. The legislation proposes, among other things, to set up a SoundExchange-like collective for the collection and payment of mechanical royalties due under Section 115 of the Copyright Act and to create a digital public performance right in pre-1972 sound recordings (ending some of the litigation that has arisen in recent years on that issue). Our summary provides more details on these issues and highlights some of the other issues addressed by this bill.

The consideration of the bill by the Judiciary Committee is the next step to the bill becoming a law. The hearing will feature representatives of several groups directly affected by the legislation – including David Israelite, the CEO of the National Music Publishers Association (NMPA represents publishing companies that usually hold the copyrights to musical compositions); Chris Harrison, the CEO of the Digital Media Association (DiMA represents digital music services like Spotify, Pandora and Apple Music); and Mitch Glazier, the President of the Recording Industry Association of America (RIAA represents the major record labels who usually own the copyrights to the sound recordings – the compositions as recorded by particular performers). Members of DiMA and the RIAA pay mechanical royalties. Members of NMPA collect those royalties. Thus, these groups are directly affected by the Music Modernization Act. Songwriters and performers, including Motown legend Smokey Robinson, will also testify at the hearing. A full list of the participants can be found on the Judiciary Committee’s website, where video of the hearing will also be available next week.
Continue Reading Senate to Hold Hearing on May 15 on Music Modernization Act

May is one of those months where there are neither deadlines for EEO Public File Reports nor for any of the quarterly filings of issues/programs lists and children’s television reports. But the lack of these routine filing deadlines does not mean that there are no dates of interest in the coming month to broadcasters and other media companies. As seemingly is the case every month, there are never times when Washington is ignoring legal issues potentially affecting the industry.

May 10 brings an FCC meeting where two items of interest to broadcasters will be considered. One is a proposal to abolish the requirement for posting licenses and other operating authorizations at a broadcaster’s control point and to eliminate the requirement that FM translators post information about the station’s licensee and a contact phone number at their transmitter sites (see our post here for more details). The second is a proposal to modify the processing of complaints about new or modified FM translators causing interference to existing stations. See our summary of that proposal here. If adopted at the May 10 meeting, these proposals will be available for public comment after they are published in the Federal Register.
Continue Reading May Regulatory Dates for Broadcasters – FCC Meeting, FM Translator and LPTV Filing Windows, Political Windows and More Consideration of Music Reforms

This week, the US House of Representatives passed the Music Modernization Act. While widely supported among many digital media companies providing on-demand subscription music services as well as by many in the music industry, the bill seemingly has not received the publicity that has been afforded to past music royalty legislation. That may be, in part, because there were few who adamantly opposed the provisions of the bill, as evidenced by a unanimous House vote – something that never would have happened had any significant portion of the music industry opposed the bill. But this moment of togetherness may be, in part, due to the somewhat limited (though nevertheless very important) issues that it addresses.

The Modernization of Music Act began as a legislative effort primarily to address the issues raised under Section 115 of the Copyright Act – the section dealing with what are often called “mechanical royalties” – the royalties paid to publishing companies for the copyright in the “musical work,” i.e. the musical composition. In other words, these royalties are paid to the copyright holder of the words and music to a song (sometimes the composer but more often a publishing company) – not to the artist who actually records that song. The provisions of Section 115 were first adopted to allow artists to record songs once a song has been recorded and publically released in the United States – to record a “cover” of the original recordings – provided that compensation set by agreement between the user and the copyright holder is paid or, absent a voluntary agreement, that a royalty set by the Copyright Royalty Board is paid to the copyright holder (see our post here on the last CRB decision on those rates). That mechanical royalty was later expanded to cover “digital phonorecord deliveries” (“DPDs”) – the making of digital copies of the musical composition made in the context of a distribution and delivery of the song to individual consumers. Through caselaw and industry practice, DPDs were interpreted to include the need for royalties not just when a digital download is made, but also when an on-demand or interactive stream of a song is delivered to a consumer.
Continue Reading House of Representatives Passes Music Modernization Act – Looking for Clarity on Mechanical Royalties, Pre-1972 Sound Recordings and Other Music Rights Issues