Music Rights

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The amount paid to songwriters and publishing companies for the making of “phonorecords” will be going up after a Copyright Royalty Board decision just released to the parties to the case. A summary of the findings have been published on the CRB website, here. The new rules are available here. A full decision explaining the CRB reasoning will follow at some later date.

These royalties are not ones paid by broadcasters or non-interactive webcasters or internet radio stations. Instead, these are the royalties paid under Section 115 of the Copyright Act for the making of copies of musical compositions when making a sound recording (this would include the amount paid by a record label or performing artist to the composer of a song or the composer’s publishing company for the use of the composition in a CD or for a digital download) and, more importantly in today’s world, in connection with on-demand or interactive music services. While one might wonder if an on-demand stream really makes a reproduction of a composition when it is sent to a customer to enjoy, by tradition that has grown up over the last decade, these royalties are paid by these services (though, in one case, Spotify questioned whether they were legally required).
Continue Reading Copyright Royalty Board Decision Will Raise Royalties Paid to Songwriters and Publishers By Digital Music Services

The Copyright Royalty Board on Friday published in the Federal Register its decision setting the royalty rates that noncommercial broadcasters will pay to the performing rights organizations for the public performance of musical compositions in over-the-air broadcasting during the period 2018-2022.  The rates reflect settlements between ASCAP, BMI and SESAC and various organizations representing…

The holidays are over, and while the regulation never stops, it is time to once again buckle down and look at what is on the horizon for broadcasters. While, in the next few days, we will have our typical look ahead at the broadcast regulatory agenda in Washington for the New Year, we also need to look at more immediate deadlines in the month of January. As we are at the beginning of a calendar quarter, the tenth of the month is the date for broadcasters to add their Quarterly Issues Programs Lists for the just completed quarter to their public file – whether it be the online public file for TV broadcasters and the many radio groups that have already converted to the online file, or into the paper file for those radio broadcasters waiting until the last minute before making the conversion to the online file as required by March 1. These Quarterly Issues Programs lists are the only FCC-required documents showing how a broadcaster has met its public interest obligations to serve their communities and, as we have written many times (see, for instance, here and here), the FCC considers them to be very important, and thus have led to numerous substantial fines for broadcasters who have not met the FCC’s requirements.

TV broadcasters also need to file their Children’s Television Reports with the FCC by the 10th of the month, and place information into their public file about how they complied with the commercial limits on children’s television programming. As we have written before (see our articles here and here), these, too have been the subject of numerous FCC enforcement actions when the Commission becomes aware that the reports were not filed, or were submitted late. So be sure to timely file these reports with the FCC, and place the information about compliance with the commercial limits in your online public file by the deadline.
Continue Reading January Regulatory Dates for Broadcasters – Quarterly Issues Programs Lists and Children’s Television Reports, FM Translator Window, Main Studio Rule Change and Streaming Requirements

Yesterday, the US Court of Appeals for the Second Circuit in a “Summary Order” that the Court said does “not have precedential effect,” upheld an even briefer decision of the US District Court Judge who oversees the BMI antitrust consent decree, determining that the Department of Justice was wrong in its interpretation of the consent decree requiring that all songs licensed by BMI represent 100% of the musical work. This is a very arcane issue very deep into the nitty-gritty of copyright law – and an issue that we wrote about several times before, including our articles here and here.

The issue arises as many songs are written by several co-writers. Often times, it is simply a composer of the music and someone else who writes the lyrics. But more and more in many musical genres, there are multiple people who receive songwriting credits on any single song. Each of these authors is deemed to have a “fractional interest” in the song. When these multiple authors of a song belong to different performing rights organizations (e.g. ASCAP, BMI, SESAC and GMR, organizations which authors and their publishing companies join to simplify music licensing to users of lots of music – like radio stations, digital music services, and even bars, restaurants and retail establishments that play music to entertain customers), the issue addressed in this case arises. The question that parties before the court have been debating is whether, when one of these PROs signs a deal with a music user, the user gets the rights to actually perform the song, or whether they simply get the fractional interest in the song that is held by the songwriter who is a member of the PRO, which would require that the user also get the rights to the other fractional interests before the user can play the song.
Continue Reading Court of Appeals Upholds BMI Decision Allowing Fractional Music Licensing – What Are the Issues?

The Copyright Royalty Board issued a notice yesterday, here, that summarized its decision on the sound recording performance royalties for 2018-2022 to be paid by Satellite Radio and “Pre-existing Subscription Services” (“PSS”), essentially Music Choice for its music service usually packaged with cable television subscriptions. The terms associated with the new rates, embodied in the new rules adopted by the CRB, are available here. The CRB announcement states that the Sirius XM rates will be 15.5% of revenue, which represents an increase from the 11% they are paying currently. The terms for these rates set out a means by which Sirius XM can reduce the revenue subject to the royalty by directly licensing music or using pre-1972 sound recordings, the percentage of such songs being determined by determining their percentage of play on Sirius XM Internet radio channels that correspond directly to their satellite service.

By contrast, the rates for Music Choice (and any other similar PSS having been established prior to 1998 when the Digital Millennium Copyright Act was adopted that may still be in existence) decreased from 8.5% of revenue to 7.5%, the rate that had been in effect in 2012. Our article here describes the decision in 2012 setting the current royalty, and the article here summarizes the Court of Appeals decision upholding the 2012 CRB determination.
Continue Reading Copyright Royalty Board News – Sirius XM Rates Going Up, Some Cable Radio Rates Going Down, and Webcasting Rate Appeal to Be Argued in February

Yesterday brought news that a Federal Magistrate issued a ruling (a 42 page order discussing fine points of law) deciding that the antitrust lawsuit brought by RMLC against GMR should not be tried in the Pennsylvania court where the suit was brought. As we wrote here, RMLC (the group that represents many commercial radio operators in music licensing matters) had argued that GMR (a relatively new organization representing songwriters in licensing music use as do ASCAP, BMI and SESAC) was acting in violation of the antitrust rules by trying to license music from a number of songwriters at prices well in excess of the amount that corresponded to these artists’ share of radio airplay. GMR seemingly retaliated by suing RMLC in a Los Angeles court, arguing that RMLC itself violates the antitrust laws by functioning as a buyer’s cartel unifying music licensing buyers against these songwriters (see our article here). Since these dueling suits were filed, the parties have been fighting over where this case should be heard.

RMLC had brought their case in Pennsylvania both because a number of RMLC members operate in Pennsylvania and because RMLC had obtained a favorable result in that court in similar litigation against SESAC, leading to the arbitration process that substantially decreased the rates that the commercial radio industry pays to that organization (see our article here). GMR sued in California as it is headquartered there, and presumably thought that it might get a bit of a “home court advantage” by trying a case in a state a bit more disposed toward content creators. So what does the decision yesterday mean?
Continue Reading Magistrate Rules RMLC Suit Against GMR Should Not Be Litigated in Pennsylvania – What Does that Mean for Radio Companies?

The Copyright Royalty Board yesterday announced in the Federal Register, here, that the sound recording royalty rates paid to SoundExchange will be increasing next year.  In December 2015, when the CRB set the current royalty rates that apply from January 1, 2016 through December 31, 2020 (see our articles here and here),…

In a decision this week, the Florida Supreme Court rejected claims by Flo & Eddie (of the 1960s band the Turtles) that there was a common law public performance right in pre-1972 sound recordings in the state of Florida (the opinion is available here). The Florida court, after examining numerous avenues of argument, concluded that the establishment of such a right was a legislative task. A judicial declaration that the right existed would, in the Court’s words, “have an immediate impact on consumers beyond Florida’s borders and would affect numerous stakeholders who are not parties to this suit.” It would also upset settled expectations, as the determination that there was a right would effectively create a sound recording performance right greater than that which has ever been recognized in the US – far broader than the limited right granted under Federal law to cover digital performances of sound recordings. The Court went on to conclude that other claims raised by Flo & Eddie were similarly unavailing. The Court found that any reproductions made in the transmission process by Sirius XM (the defendant in the case) were not entitled to composition as they were transitory and made only for purposes of the transmission, not for public consumption (and as Florida law specifically permitted limited reproductions by radio broadcasters and the Court considered Sirius to fit that definition). And, as there was no violation of any rights of the plaintiffs, the use of the recordings could not constitute unfair competition or conversion.

This case reached the Florida Supreme Court when it was certified by the United State Court of Appeals which was reviewing a District Court decision reaching the same conclusion as did the Florida Supreme Court – that there was no performance right under state law for pre-1972 sound recordings (see our summary of the District Court decision here). The Supreme Court’s decision in Florida is similar to that reached by the Court of Appeals in New York (the state’s highest court), about which we wrote here, determining that there was no NY state law public performance right in pre-1972 sound recordings. As we’ve written many times, pre-1972 recordings are not governed by Federal law, which was only extended to cover reproduction rights in sound recordings in that year, leaving all pre-1972 rights in sound recordings with the states. Georgia and Illinois have reached similar decisions in slightly different cases (see our article here on the Georgia decision). In California, where a District Court found a public performance right in pre-1972 sound recordings, we are awaiting word from its Supreme Court as to whether such rights exist in that state (see our article here on the certification of this question to the California Supreme Court).
Continue Reading Florida Supreme Court Rejects Public Performance Right in Pre-1972 Sound Recordings – What’s Next?

The alphabet soup of organizations that collect royalties for playing music has never been easy to keep straight, and today royalty issues sometimes seem even more daunting with new players like GMR (see our articles here, here and here) and arguments over issues like fractional licensing that only a music lawyer could love (see our articles here and here). But there are certain basics that broadcasters and other companies that are streaming need to know. Based on several questions that I received in the last few weeks, I’ve been surprised that one of the issues that still seems to be a source of confusion is the need to pay SoundExchange when streaming music online or through mobile apps. For the last 20 years, since the adoption of the Digital Millennium Copyright Act, anyone digitally transmitting noninteractive music programming must pay SoundExchange in addition to ASCAP, BMI and SESAC (and more recently GMR) for the rights to play recorded music – unless the service doing the digital transmission has directly secured the rights to play those songs from the copyright holders of the recordings – usually the record labels.  Why is there this additional payment on top of ASCAP, BMI and SESAC?

SoundExchange represents the recording artists and record labels for the royalties for the performance of the recording of a song (a “sound recording” or a “master recording”).  ASCAP, BMI, SESAC and GMR by contrast represent the songwriters who wrote the song (not the performers) and their publishing companies.  When you play music on your over-the-air radio signal, you only pay for the public performance rights to the underlying musical composition or “musical work” as it is often referred to in the music licensing world – the words and music of the song.  This money goes to the songwriters and their publishing companies (the publishing companies usually holding the copyright to the musical composition). But, in the digital world, for the last 20 years, anyone who streams music, in addition to paying the songwriters, must pay the performers who recorded the songs and the copyright holders in the sound recordings (usually the labels).  That is the royalty that SoundExchange collects.
Continue Reading Are You Streaming Your Radio Station? Reminder that Broadcasters Need to Pay Royalties to SoundExchange as well as ASCAP, BMI and SESAC

Summer is coming to an end, but the legal obligations never take a vacation, and September brings another list of regulatory deadlines for broadcasters. While the month is one of those without the usual list of EEO Public File obligations or quarterly FCC filing obligations, there still are a number of other regulatory deadlines for which broadcasters need to be prepared.

For commercial broadcasters, the September date that should be on everyone’s mind is the deadline for the payment of annual regulatory fees. As we wrote here, there is an FCC order circulating among the Commissioners that should be released any day, setting the amounts of the regulatory fees and the deadline for their payment. These fees will almost certainly be due in September, prior to the start of the government’s fiscal year on October 1. So stay alert for the announcement of the window for paying these “reg fees.”
Continue Reading September Regulatory Dates for Broadcasters – Including Reg Fees, Nationwide EAS Test, Must-Carry Letters, Lowest Unit Rate, Translator and Repack Deadlines and GMR License Extension