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?

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.

  • Because of the Supreme Court’s decision earlier this year upholding the Commission’s 2017 relaxation of certain media ownership rules, the

According to press reports (see this story in Verge and this one in the Washington Post), Facebook will end its policy of not subjecting posts by elected officials to the same level of scrutiny by its Oversight Board that it applies to other users of its platform.  Facebook’s announced policy has been that the newsworthiness of posts by politicians and elected officials was such that it outweighed Facebook’s uniform application of its Community Standards – though it did make exceptions for calls to violence and questions of election integrity, and where posts linked to other offending content.  Just a year ago, there were calls for Facebook to take more aggressive steps to police misinformation on its platforms. These calls grew out of the debate over the need to revise Section 230 of the Communications Decency Act which insulates online platforms from liability for posts by unrelated parties on those platforms (see our article here on Section 230). Last year, we compared Facebook’s policy with the laws that apply to other communications platforms, including broadcasters and cable companies.  In light of the potential change in Facebook’s policy, we thought it would be worth revisiting that analysis now.  Here is what we wrote last year:

[In January 2020], the New York Times ran an article seemingly critical of Facebook for not rejecting ads  from political candidates that contained false statements of fact.  We have already written that this policy of Facebook matches the policy that Congress has imposed on broadcast stations and local cable franchisees who sell time to political candidates – they cannot refuse an ad from a candidate’s authorized campaign committee based on its content – even if it is false or even defamatory (see our posts here and here for more on the FCC’s “no censorship” rule that applies to broadcasting and local cable systems).  As this Times article again raises this issue, we thought that we should again provide a brief recap of the rules that apply to broadcast and local cable political ad sales, and contrast these rules to those that currently apply to online advertising.
Continue Reading Reports that Facebook Will End Policy of Not Censoring Politician’s Posts – How Other Communications Platforms are Regulated on Political Speech

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?

There can be no doubt that local newspapers have been significantly impacted over the last two decades by the ascent of the Internet.  And, as we have written before (see, for instance, our article here), digital media has also had a significant impact on the local revenues of broadcasters, who also have traditionally specialized in covering local events.  To study the effect of the decline in local news sources, legislation has been introduced in both the House and Senate to create a government committee to look at various aspects of this issue. The “Future of Local News Committee” would include individuals appointed by the majority and minority in the House and Senate, as well as individuals selected by the Corporation for Public Broadcasting, The National Endowment for the Humanities, and the US Agency for Global Media.  Each appointee is to be someone experienced in some aspect of local media.  The committee would have one year to deliver a report to Congress.

What would they study?  The legislation suggests that the committee would have broad investigatory powers to review how the change in local media has affected local communities.  The bill’s preface includes language stating that over 2000 newspapers have gone out of business since 2004, and that of the 6,700 remaining, 1000 could be classified as “ghost newspapers” whose staffs have been so reduced that they cannot effectively cover local events.  The bill also cites a Pew Research study that shows that local newsroom employees at newspapers, broadcast outlets and digital sources dropped 25% from 2008-2018.  Perhaps most startling is the statement that newspapers alone lost more than $35,000,000,000 in revenue between 2004 and 2018.  All these factors, and many others cited in the bill, are alleged to show that local media can no longer effectively cover local events.
Continue Reading Does Local News Need Government Assistance to Survive – Legislation Proposed to Set Up Commission to Study the Impact of Changes in Local Media on Local Communities  

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 speech to the Media Institute, FCC Commissioner Starks spoke of the importance of diversity in media ownership and