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Over-the-top video systems, using the Internet to transmit over-the-air TV signals to consumers, are back in the news. Last week, a US District Court Judge in the Central District of California, in a case involving FilmOnX, an Aereo-like service that had been involved in many of the court decisions that had preceded the Supreme Court’s Aereo decision, suggested that such platforms can get that public performance right through the statutory license provided by Section 111 of the Copyright Act – the same section of the Act that allows cable systems to retransmit broadcast signals without getting permission from every copyright holder of every program broadcast on those stations. Just last year, we were writing about the Supreme Court decision in the Aereo case, where the Court determined that a company could not use an Internet-based platform to stream the signals of over-the-air television stations within their own markets without first getting public performance rights from the stations themselves. The new decision raises the potential of a new way for these Internet services to try to get the rights to rebroadcast TV signals.

The FilmOn decision was on a motion for summary decision, and is a very tentative decision – the Judge recognizing that he was weighing in on a very sensitive subject, going where both the FCC and the Copyright Office have thus far feared to tread, and disagreeing with the Second Circuit Court of Appeals that had held the opposite several years ago in the Ivi decision. The FilmOn decision is a preliminary one – subject to further argument before the Judge at the end of the month. Even if adopted as written, the judge recognized the potential impact of his decision, and the fact that it contradicted Ivi and other decisions. Thus, the decision stated that its effect would be stayed pending an immediate appeal to the Ninth Circuit Court of Appeals. So, even if finalized, we have not seen the last of this argument yet.
Continue Reading A Compulsory License for Internet TV Platforms to Retransmit Broadcast TV? One US District Court Considering FilmOnX Seems to Think So

It’s another summer with music copyright issues hitting the press almost every day. Over the next week or two, we will try to catch up on some of the legal issues raised by all the music news. First, let’s look at the significant actions in the last ten days in the battle over whether there is a public performance right in pre-1972 sound recordings. Just a few days after there was a court decision (available here) finding that there was no common law public performance right in pre-1972 sound recordings under Florida law, Sirius XM last week announced that it had settled the case brought against it by the major record labels by agreeing to pay $210 million for nationwide public performance rights to the catalog of recordings that these labels own, said by Sirius’ SEC 8-K filing to comprise about 80% of those sound recordings. Obviously, that settlement does not appear to resolve the issues with independent sound recording owners (like Flo & Eddie who brought the actions that have resulted in NY and California decisions finding a performance right in pre-1972 recordings in those two states). But what do the settlement and Florida decision mean for other users of these recordings?

First, a review of the issue with pre-1972 sound recordings. With all of the copyright issues that have been in the news in the last few weeks, that review is necessary so that readers really understand the issues involved in this case – beyond just the headlines. Pre-1972 sound recordings (sound recordings being a song or other audio material, as recorded by a particular artist) first released in the United States are different than other sound recordings, as they do not have protections under Federal copyright law. Prior to 1972, Federal copyright law did not protect sound recordings at all, only protecting what is referred to as the “musical work” or “musical composition” (the underlying words and music of a song). The actual recording of the song was protected only under state laws, and most state laws addressed only unauthorized reproductions of those recordings (e.g. bootlegged copies), not performance rights. When copyright protections over sound recordings were federalized in 1972, states were left with the right to determine how to deal with pre-1972 recordings.
Continue Reading Understanding the Murky State of the Performance Right in Pre-1972 Sound Recordings – Florida Court Rejects the Right yet Sirius XM Settles With the Record Labels

The Copyright Royalty Board has begun the hearing phase of its proceeding to set the royalties to be paid by webcasters (or noninteractive digital music services) for public performances of sound recordings for the years 2016-2020. These are the royalties paid by Internet radio companies to SoundExchange, allowing them to play any recorded music legally released in the United States since 1972 (see our article here about issues regarding pre-1972 sound recordings), as long as the digital service pays the royalties set by the Board and observes other rules set by the Copyright Act. This proceeding began in January 2014, when the CRB asked for petitions to participate in the proceeding. After those petitions, parties had time to engage in settlement discussions before filing “written direct cases” last October – written witness statements setting out the rates proposed by each party and the justifications for those rates (see our summary of the parties initial proposals here). Since that time, the parties have been engaged in discovery, producing mountains of documents relevant to the claims made, and conducting depositions of a number of witnesses. This week, the case moved into its trial phase.

On Monday, the parties still participating in the proceeding presented to the 3 CRB judges their opening statements where their attorneys summarized what they hope to prove over the next 5 weeks of trial. During the trial, the parties will formally introduce their written statements (available on the CRB website, here, with sensitive business information redacted), which have been amended based on facts uncovered during the discovery that was conducted, and their written rebuttal testimony – testimony that was provided to the CRB in February to rebut the initial written cases (available on the CRB website, here, with sensitive business information redacted). Such rebuttal testimony has itself been subject to the discovery process. There can be various objections to the written evidence presented – including questions of hearsay or relevance to the proceeding. For virtually all of the written statements, the individual who provided that testimony will be present at the hearing to introduce that testimony, and each witness will be subject to cross examination by the other parties. As is evident by the number of exhibits that have been submitted, there will be dozens of witnesses to be heard – from renowned economists and other experts, to record label and digital music company executives, to broadcasters large and small. 
Continue Reading Copyright Royalty Board Begins Hearings on Webcasting Royalty Rates for 2016-2020 – When Will We See a Decision?

We have written in the past about the concerns that broadcasters face about the unauthorized use of photos on station websites. Some broadcasters have had problems when they found that photos posted on their websites were posted without permission of the copyright holder – and representatives of the copyright holder contacted the stations with demands for significant compensation. We reminded broadcasters that everything that you find on the Internet cannot be appropriated for your own uses – that copyrighted material retains copyright protections even when it is made available on the Internet. It appears that this is not an isolated problem, as the Copyright Office has just announced the commencement of a study to determine how best to protect the copyrights of photographers and those who produce other digital images. In this digital age, when photos and other images can be copied and reproduced digitally, distributed on websites and through other digital means, often stripping out any embedded information about the copyright owner, problems in copyright enforcement are common. The Copyright Office seeks information both from copyright owners and from users of such images on how to best protect copyrights, while at the same time making it possible for users to obtain clearances for photos that they want to use.

This issue for broadcasters actually cuts both ways, as broadcasters themselves create photos and other images it their news coverage, and in connection with other station activities and events. They don’t want these images exploited by competitors and other media sources without permission. So legal clarity could be a good thing, as it will not only to help broadcasters clear rights to use photos and other images online and in their over-the-air broadcasts, but it will also help them to protect the images that their employees create in the course of their broadcast employment. What does the Copyright Office ask?
Continue Reading Copyright Office Starts New Study on Enforcing Copyrights on Photos and Other Visual Images in a Digital World

Press reports indicate that the Department of Justice is nearing the completion of its study of whether to suggest the revision of the antitrust consent decrees that have bound ASCAP and BMI for over a half century (see our summary of the issues that DOJ is considering here). Much of the impetus behind this review comes from claims from songwriters and their associated publishing companies that they simply are not receiving enough money from digital music services. In the music industry trade press, one can barely go a day without seeing some article about a songwriter whose song was played a million times on a digital music service like Pandora or Spotify, with the artist only receiving some relatively small amount of royalty revenue from that seemingly large number of plays. In looking at this question, I think that there are a number of issues that are misunderstood – perhaps the greatest being the meaning of big numbers – what is really meant when a song is played a million times by a digital music service. I’ve moderated two panels in the last month where royalty experts debated royalties generally and this topic specifically, and I will be moderating another at the RAIN Summit West in Las Vegas on Sunday. Before that discussion, and for those who won’t be at the RAIN Conference, I thought that it would be worth exploring some of this confusion about this issue here.

Last month, the Senate Judiciary Committee’s Antitrust Subcommittee held a hearing on the DOJ’s review of the antitrust consent decrees (video of the hearing, and written witness statements, are available here). During the course of the hearing, a songwriter representative, when asked by a Senator about the alleged impact of digital royalties on the songwriting community, made the assertion that when his song was played a million times on terrestrial radio, he could pay his bills, but when that song was played a million times on a digital service, he received only a few hundred dollars. While this kind of claim is made every day by songwriter representatives, and has contributed to the examination of music royalties being conducted by Congress (see our articles here and here), the Department of Justice and the Copyright Office (see our article here), in many ways, these claims seem to evidence a fundamental misunderstanding of the nature of digital services. It is truly a comparison of apples and oranges (or maybe apples and watermelons might be more appropriate) that has distorted the conversation about royalties. The claim was challenged at the Judiciary Committee hearing by a representative of Pandora, who pointed out that the million people reached by the million spins of a record on Pandora is the equivalent audience reached by something like 16 spins on a New York radio station. I thought that this exchange was crucial to the understanding of the issues involved in the examination of changes to the ASCAP and BMI royalty structure, yet I saw little or no coverage of the issue in press reports after the hearing.
Continue Reading How Misunderstandings about Big Numbers Distort the Debate over Songwriter Digital Music Royalties – As the DOJ Readies its Recommendations for Reform of the ASCAP and BMI Consent Decrees

In a decision just released by the FCC, a TV station was admonished for including, in the credits of a TV program, the URL for a website that contained commercial material. As this was deemed by the FCC to be an isolated occurrence, the station was only admonished, not fined for the violation. But the decision is a good reminder for TV stations of the advertising and marketing restrictions that apply to children’s television programs and to links to websites contained in such programs.

The FCC’s rules prohibit a station from including a website’s address in programming directed to children 12 and under unless it meets a 4 part test. The four parts of that test are as follows:

  1. the website offers a substantial amount of bona fide program related or other noncommercial content;
  2. the website is not primarily intended for commercial purposes, including either e-commerce or advertising;
  3. the website’s home page and other menu pages are clearly labeled to distinguish the noncommercial from the commercial sections; and
  4. the page of the website to which viewers are directed by the website address is not used for e-commerce, advertising, or other commercial purposes (e.g., contains no links labeled “store” and no links to another page with commercial material)

In this case, the website had commercial content, leading to the admonition to the station. The URL was apparently visible for less than a second, in the credits, and ran only once. As this was an isolated instance, the station was not monetarily penalized, but the FCC did make clear that this was a rule violation.
Continue Reading FCC Admonishes TV Station for Including Commercial Website Address in Children’s Program – A Good Reminder on Children’s Television Program Restrictions

The Songwriter’s Equity Act has once again been introduced in Congress (see our article about that Act when it was introduced in the last Congress). It proposes to make changes in provisions of the Copyright Act governing the way that songwriters are paid for the use of their musical compositions – with the obvious intent of raising the songwriters’ compensation. This legislative proposal is one reflection of the complaints by songwriters that they are not sufficiently compensated for the use of their music. It is interesting that this bill was introduced during the same week that ASCAP announced its first year of billion dollar collection for songwriter’s public performance royalties, and at the same time that the Senate explores more comprehensive changes to the antitrust consent decrees that govern ASCAP and BMI through a hearing held last week, with the Department of Justice review of these decrees expected in the not too distant future (see our article here).

The Act makes seemingly small changes in legislation, but those changes could have a significant impact on how rates paid to songwriters are computed. The first change proposed is to allow the rates set for the public performance of sound recordings (those royalties that digital music services pay to SoundExchange for the public performance of sound recordings – the actual recordings of songs as opposed to the performance of musical compositions for which ASCAP, BMI and SESAC pay songwriters) to be used as evidence by the judges setting rates for the public performance of musical compositions. That has been prohibited under current law. It is interesting to note that, under Copyright Royalty Board precedent, the Copyright Royalty Judges have in the past determined that the rates paid by music services for the public performance of musical compositions are not a precedent for the public performance of sound recordings, as they are different rights that are not necessarily of the same value. Yet this legislation seems to assume that the royalties for sound recordings are in fact instructive as to what those rates should be for public performances. While seemingly acknowledging the relevance, the legislation does not allow the reverse – stating that the legislation should not be seen as having any effect on the precedent already established by the CRB for the rates for the public performance of sound recordings, so that the rates for sound recordings should not be affected by this legislation.
Continue Reading Songwriter’s Equity Act Reintroduced – What Does It Propose?

The FCC has extended the Reply Comment deadline in its proceeding looking at whether to apply some or all of the regulations applicable to multichannel video programming distributors (MVPDs – cable and satellite TV) to over-the-top video providers who provide multiple channels of video programming in a linear fashion (i.e. like a cable system, with…

March is one of those rare months on the broadcast calendar when there are few routine regulatory deadlines for broadcasters. As we are winding down in the television license renewal cycle, the month’s only license renewal obligations for TV broadcasters are the pre-filing license renewal announcements on the 1st and 16th of the month for stations in Delaware and Pennsylvania, whose renewals are due on April 1, and the post-filing announcements for TV stations in New York and New Jersey. But there are still dates of interest to broadcasters in the month ahead. Here are some of those dates.

March also brings the obligation, by March 16 for TV stations to be in compliance with the Closed Captioning Quality Standards, which require that broadcasts assess and work to perfect the quality of the closed captioning carried on their stations. While the FCC is looking at bringing television program suppliers under these rules, as of now, the obligation for compliance with the rules is on the television broadcaster. We wrote about the captioning quality rules and the FCC’s recent proceeding to shift some of the burden to program suppliers here.
Continue Reading March Regulatory Dates for Broadcasters – Closed Captioning Quality Standards Effective Date, Comments on Online Public File, MVPD Status for Online Video Providers, LIFO for Political Ads, and FRNs for Biennial Ownership Reports

The FCC yesterday released a public notice extending the comment dates in their proceeding to regulate Online (or “over-the-top”) Video, particularly Internet video providers who provide multiple channels of linear video programming (programming streamed at the same time to all viewers, as opposed to on-demand video like that provided by Netflix or Amazon), in the …