The last two weeks have been filled with stories about Neil Young, Joni Mitchell and other artists pulling their music from Spotify in protest of its carriage of the Joe Rogan podcast.  While the political statements made by these actions generate the news, there are rights and royalty issues behind the story that are worth exploring.  While Washington Post articles here and here touch on some of these issues, looking at them in more depth helps to explain the importance that Spotify places on podcasts and why it would be reluctant to pull a podcast that has so many listeners (reportedly over 10 million per episode), even if the podcast has content that may be objectionable.  The issues raised by this controversy are also tied into two other stories that made the news for broadcasters this last week – Congressional hearings on the Journalism Competition and Preservation Act and on a potential sound recording performance royalty on over-the-air radio – topics we will cover in subsequent articles.

Let’s first look at the question of why Spotify, which started as a music service, has pushed so hard into podcasting.  We will follow up with a discussion of the issues on the artist side of the equation in a second article.  Spotify reportedly paid more than a hundred million dollars for the rights to the Rogan podcast.  It has also invested heavily in other podcast companies – including buying podcast technology companies including Anchor and Megaphone, and podcast content aggregators including Gimlet and the Ringer.  Deals with celebrities for their podcasts include those with former President Obama for his podcast with Bruce Springsteen, as well as an announced content creation deal with Prince Harry and Meghan Markle.  Why would a music service spend so heavily to get into spoken word programming?
Continue Reading Spotify, Joe Rogan and Neil Young – Looking at the Rights and Royalty Issues Behind the Story (Part 1 – Why Spotify Has Been Promoting More Podcasts)

As 2021 wound down, there were significant developments on SoundExchange royalties for webcasters – including broadcasters who simulcast their on-air programming through IP channels (such as on their websites and on mobile apps).  While we covered many of these matters in our weekly Sunday updates on regulatory matters of importance to broadcasters, we thought that it would be worth summarizing all of the action in one place.  Most, but not all, of these developments follow from last year’s  Copyright Royalty Board decision  raising webcasting rates for 2021-2025 (see our article here summarizing that decision).

The CRB’s decision was published in the Federal Register in October 2021.  As of that date, all webcasters, if they had not already been doing so, should be paying the higher royalties ($.0021 per song per listener in 2021 for nonsubscription streams).    SoundExchange has appealed the CRB’s decision (presumably to argue the rates should have been set even higher), as have the NAB and the National Religious Broadcasters Noncommercial Music License Committee.  These appeals are pending and likely will be briefed and argued sometime in 2022.  If you have not trued up your payments (the increase in royalties was retroactive to January 1, 2021), consult your legal advisor as to the effect that these appeals may have on your responsibility for that true-up.
Continue Reading A Look at Developments in SoundExchange Webcasting Royalties (Including for Broadcast Simulcasts) From the End of 2021

As the holiday season comes to an end and 2022 comes into focus, broadcasters have several dates and deadlines to keep up with in January and early February.  We have noted below some of the important dates you should be tracking.  However, as always, stay in touch with your station’s lawyers and other regulatory advisors for the dates applicable to your operations.  We wish you a happy, healthy, and successful New Year – and remembering to track important regulatory dates will help you  achieve those ends.

Let’s start with some of the annual dates that always fall in January.  By January 10, full-power radio, TV, and Class A licensees should have their quarterly issues/programs lists uploaded to their online public file.  The lists are meant to identify the issues of importance to the station’s community and the programs that the station broadcast in October, November, and December that addressed those issues.  Prepare the lists carefully and accurately, as they are the only official records of how your station is serving the public and addressing the needs and interests of its community.  See our post here for more on this obligation.
Continue Reading January Regulatory Dates for Broadcasters: Issues/Programs Lists; Digital LPTV Deadline; Audio Description Expansion; Children’s Programming, Webcasting Royalties; NCE FM Settlement Window; and More

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.

  • FCC Chairwoman Jessica Rosenworcel’s nomination for another five-year term at the agency was approved by the Senate Commerce Committee. The

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.

  • President Joe Biden made official his permanent FCC Chair – selecting Acting Chairwoman Jessica Rosenworcel to fill that position. He

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.

  • In a significant win for television broadcasters, a federal district court in New York determined that the nonprofit company Locast,

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?