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According to British press reports, Warner Music’s CEO Edger Bronfman Jr. stated that it will cease making its music available to advertising supported streaming music sites.  This has prompted some questions about how this decision would affect services such as Pandora, Slacker, Accuradio and other Internet radio companies – would it deny them access to substantial amounts of music?  In fact, as these US services operate under a "statutory license", created by Congress, they get access to  all legally recorded music in exchange for the payment of a royalty established by the Copyright Royalty Board.  Essentially, under this statutory license (otherwise known as a "compulsory license"), a copyright holder cannot deny access to companies operating under the license, as long as those companies comply with terms of the license, and pay the established royalty.  Thus, even if the Warner Music decision really is true, this decision should have little or no impact on US Internet Radio stations operating under the compulsory license.

What would it affect?  Presumably it could hurt services that don’t rely on the statutory license.  Internet Radio operators who want to rely on the statutory license must meet a set of requirements set out by statute in order to qualify for the license.  We’ve written about those obligations before here, in connection with the waiver of some of these requirements in the royalty settlement between SoundExchange and the NAB.  Services operating under the license must meet the "statutory complement", meaning that they cannot play more songs from an artist or CD in a given time period than allowed by the law, specifically:

  • No more than 3 songs in a row by the same artist
  • Not more than 4 songs by same artist in a 3 hour period
  • No more than 2 songs from same CD in a row

In addition, Section 114 of the Copyright Act sets out other limitations on a service operating under the statutory license.  The service must provide the name of the artist, song and CD in text on its site, to the extent technically possible, while the song is playing.  There are also certain restrictions about tying the music being played to commercial content on the site, and requiring that sites take steps to prevent digital piracy.  And, most importantly, the service cannot be "interactive."Continue Reading Warner Music Says No More Music for Streaming – What’s It Mean for US Webcasters?

Each year poses a new set of regulatory deadlines, and to help you remember all of those deadlines, the Davis Wright Tremaine Broadcast Group has prepared a calendar setting out the dates that broadcasters need to remember in 2010.  The calendar can be found here, and sets out FCC imposed deadlines for, among…

Many Webcasters who have elected the the royalty rates set by many of the settlement agreements entered into pursuant to the Webcasters Settlement Act must file an election notice with SoundExchange by January 31 to continue to be covered by those settlement agreements.   These agreements were entered into by groups of webcasters and SoundExchange, and allow the webcasters to pay royalties at rates lower than those rates set by the Copyright Royalty Board for 2006-2010.  January 31 is an important date even for those webcasters who are covered by agreements that don’t demand an annual election, as most Internet radio operators must make annual minimum fee payments by January 31.  SoundExchange does not send out reminders of these obligations, so Internet Radio operators must remember to make these filings on their own.  The original election forms filed under settlement agreements signed by the NAB and by Sirius XM cover the entire settlement period from 2006-2015, so no election form must be filed each year, though minimum fee payments must still be made.  Note that certain small broadcasters, who need not meet SoundExchange recordkeeping obligations, do need to file an election to certify that they still meet the standards necessary to count as a small broadcaster.  The WSA settlement agreements that cover Pureplay webcasters, Small Commercial webcasters, Noncommercial Educational webcasters and other noncommercial webcasters all are entered into on a year-by-year basis.  Thus, to continue to be covered, parties currently governed by these agreements need to file a Notice of Election to again be covered by these agreements by January 31 (though note that the SoundExchange website provides for filings by February 1, presumably as January 31 is a Sunday).

The election forms are available on the SoundExchange website, though they are not easy to find. The forms that must accompany the annual minimum fees are also on the SoundExchange website.  Note that in some cases there are forms that cover both webcasters who paying under a particular settlement, as well as under the special provisions for small entities that are covered by these same agreements (e.g. Small Pureplay webcasters file a different form than other Pureplay Webcasters even though both are governed by the same agreement.  Similarly Small Broadcasters file a form different than other broadcasters, though both are covered by the same agreement).  These forms can be found at the links below.  Click on the name of the category of webcasters for a link to our article that summarizes the particular settlement, the minimum fees required, and the qualifications for small webcasters under that deal (if there is such a provision):

Note that there is no specific form for NPR affiliates covered under the NPR settlement, as an organization set up by the Corporation for Public Broadcasting handles all payments and SoundExchange filings.  Other companies providing Internet radio services need to pay attention to these dates – and file the necessary papers and make the required payments by the upcoming deadline. Continue Reading Reminder: Many Webcasters Have to Make Annual Election of SoundExchange Royalty Rates and Minimum Fee Payments By January 31, 2010

Last year’s Court of Appeals decision on Internet radio royalties for 2006-2010 remanded one issue to the Copyright Royalty Board for further consideration – the issue of the minimum annual fee to be paid by each webcaster. The Copyright Royalty Judges (“CRJs”) had decided on a $500 per channel minimum fee – a fee that created much concern in the Internet radio community as there was no clear delineation of what a channel was. For services, like Pandora, where there is a unique stream created for each listener, by some definitions there could be an almost infinite number of channels all subject to the $500 minimum fee. Following the CRB’s initial decision, a number of the larger webcasters and SoundExchange entered into a settlement capping the minimum fee obligation at $50,000 per webcaster per year. Thus, services with more than 100 channels would only pay a minimum fee of $50,000 at the beginning of each year. However, this settlement was never extended to all webcasters – it applied only to those webcasters who signed the deal.  Following the Court remand, SoundExchange and DiMA (the Digital Media Association which represents many webcasters), submitted the 2007 settlement to the CRB to be codified into the rules that govern webcasters generally. Just before Christmas, the CRJs asked for comments on that settlement. Comments are due by January 22. 

In many cases, this settlement has been superseded by subsequent events – namely the settlements with webcasters that were entered into in February and then later in the summer under the provisions of the Webcaster Settlement Acts. Settlements with broadcasters, pureplay webcasters, small commercial webcasters and various noncommercial groups all set their own minimum fees (and, for the most part, cover the periods through 2015), and thus this proceeding is largely irrelevant to these webcasters. If this settlement is approved, the only remaining question before the CRJs on the remand of the 2006-2010 proceeding will be the minimum fee for some noncommercial groups that did not enter into any settlement, as this agreement on minimum fees applies only to commercial webcasters.Continue Reading Copyright Royalty Board Sets Comment Date on Internet Radio Minimum Fee Settlement

The Copyright Royalty Board has ordered that most digital music services provide "census reporting" of all songs played by their service, along with other information including the number of listeners who heard each song each time it was played.  The decision, published in the Federal Register today, is a follow up to the Notice of Proposed Rulemaking about which we wrote here, proposing this new permanent rule to replace the interim requirements that required that digital music services provide that information for two weeks each quarter.  The only exception to the new obligation was for "small broadcasters" – i.e. those broadcasters who are only obligated to pay the minimum $500 annual royalty. These small broadcasters will continue to report on the songs that they play for only two weeks each quarter.

The new general rule requiring census reporting applies to all digital music services that pay royalties to SoundExchange for the public performance of sound recordings. However, the obligations set out in this general rule do not replace different rules that may be contained in settlement agreements entered into between services and SoundExchange.  Settlements with recordkeeping exemptions include the broadcaster settlement (summarized here), which give stations the ability to exclude some of their tuning hours from the census reporting requirements that were included in that settlement, and the noncommercial settlement agreements summarized here.  The CRB decision also excludes those services where per performance reporting is not possible (such as satellite radio services where there is no easy way to count performances). Continue Reading Copyright Royalty Board Requires Census Reporting for All Webcasters Except for Small Broadcasters

On October 6, 2009, David Oxenford participated in a panel called "Post-Millennium Analysis: The DMCA in the 21st Century" at the Future of Music Coalition’s Policy Summit in Washington, DC.  Other panelists included David Carson, General Counsel of the US Copyright Office, and Mitch Glazer, Executive Vice President, Government and Industry Relations for the RIAA.  The…

On September 25, 2009, David Oxenford moderated a panel at the NAB Radio Show in Philadelphia called "The Day the Music Died – Streaming, The Performance Tax and Other Copyright Issues."  In addition to the music royalties involved in webcasting and the possible broadcast performance royalty, the panel discussed other copyright issues, including…

The question of when a digital music service is “interactive” and therefore requires direct negotiations with a copyright holder in order to secure permission to use a sound recording is a difficult one that has been debated since the Digital Millennium Copyright Act was adopted in 1998. In a decision of the Second Circuit Court of Appeals released today, upholding a jury decision in 2007, the Court concluded that Yahoo’s Launchcast service (now operated by CBS) is not so “interactive” as to take it outside of the statutory royalty despite the fact that the service does customize its music offerings to the tastes of individual listeners. To reach its decision, the Court went through an extensive analysis of both the history of the sound recording copyright and of the details of the criteria used by Launchcast to select music for a stream sent to a specific user. By determining that the service is not interactive, the service need only pay the SoundExchange statutory royalty to secure permission to use all legally recorded and publicly released music.  Had the service been found to be interactive within the meaning of the statute, the service would have to negotiate with each sound recording copyright holder for each and every song that it wanted to use on its service to get specific rights to use each song – potentially resulting in hundreds of negotiations and undoubtedly higher fees than those paid under the statutory license.

The issue in the case turned on an analysis of the DMCA’s definition of an interactive service.  The statute defines an interactive service as one where a user can select a specific song or “receive a transmission of a program specially created for the recipient.” It is clear that Launchcast did not allow a user to request and hear a specific song.  But, by specifying a genre of music, and by specifying favorite artists and songs and rating other songs played by the service, a listener could influence the music that was provided to it.  Was this ability to influence the music sufficient to make it an “interactive service” and thus take it out of the coverage of the statutory royalty?Continue Reading Court of Appeals Determines that Launchcast is Not an Interactive Service – Thus Not Needing Direct Licenses From the Record Labels

The four settlement agreements between SoundExchange and different groups of webcasters were published in the Federal Register today, setting the dates by which Internet radio operators need to opt into the terms of certain of these deals by filing a Notice of Election with SoundExchange.  The deals each have different opt in dates, so it…