ASCAP royalties

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  • The FCC announced the circulation for Commissioner review and approval of two decisions of interest to broadcasters, signifying that we
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We often write about issues concerning the royalties paid by radio stations for their various uses of music.  It is not just paying the royalties that are important, but stations must also observe all of all the other obligations under each of their license agreements.  The Radio Music License Committee asked us to remind commercial…

Earlier this week, we covered the broadcast issues that the FCC may be facing in 2024.  But the FCC is just one of the many branches of government that regulates the activities of broadcasters.  There are numerous federal agencies, the Courts, Congress, and even state legislatures that all are active in adopting rules, making policies, or issuing decisions that can affect the business of broadcasting and the broader media industry.  What are some of the issues we can expect to see addressed in 2024 by these authorities?

For radio, there are music rights issues galore that will be considered.  Early in the year, the Copyright Royalty Board will be initiating the proceeding to set streaming royalties for webcasters (including broadcasters who stream their programming on the Internet) for 2026-2030.  These proceedings, which occur every five years, are lengthy and include extensive discovery and a trial-like hearing to determine what royalty a “willing buyer and a willing seller” would arrive at for the noninteractive use of sound recordings transmitted through internet-based platforms.  Because of the complexity of the process, the CRB starts the proceeding early in the year before the year in which the current royalty rate expires.  So, as the current rates expire at the end of 2025, parties will need to sign up to participate in the proceeding to determine 2026-2030 rates early this year, even though the proceeding is unlikely to be resolved until late 2025 (unless there is an earlier settlement)(the CRB Notice asking for petitions to participate in the proceeding is expected to be published in the Federal Register tomorrow).  Initial stages of the litigation (including the identification of witnesses, the rate proposals, the evidence supporting those proposals, and the initial discovery) will likely take place this year. Continue Reading Gazing into the Crystal Ball at Legal and Policy Issues for Broadcasters in 2024 – Part II: What to Expect from the Courts and Agencies Other than the FCC

  • In the last two license renewal cycles, more fines have been issued for full-power stations violating the requirement that they
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In recent weeks, some of the radio trade magazines have been carrying coverage of the litigation between the Radio Music License Committee (RMLC) and ASCAP and BMI over the rates that will be paid by commercial radio broadcasters for the public performance of musical compositions that are licensed through these Performing Rights Organizations (PROs).   Negotiations over royalty rates are not new nor is the occasional litigation over those royalties However, because of changes in the law governing these processes, the arguments raised this year  are different and raise important new questions about what could be the first steps toward an entirely different, and perhaps fairer, process for resolving the royalties that broadcasters (and others) pay for the use of music.

What is different, and what are the arguments being made?  RMLC is arguing that the US District Court that oversees the antitrust consent decrees that govern ASCAP and BMI should consolidate the proceedings to determine the rates that broadcasters will pay, rather than considering those rates in separate proceedings.  If parties cannot agree with ASCAP and BMI as to the rates to be charged for the use of music for a particular purpose, a judge from the US District Court in the Southern District of New York conducts a proceeding as a “rate court” to determine a reasonable royalty rate, much as the Copyright Royalty Board does in establishing SoundExchange royalties for the digital public performance of sound recordings.  Because both the ASCAP and BMI agreements with the commercial radio industry have expired, proceedings are underway to determine the rates that radio will pay to these organizations. Continue Reading RMLC Requests Consolidation of ASCAP and BMI Proceeding on Radio Music Royalties – A Step Toward a Unified Process for Resolving All Music Royalty Issues? 

Last week, I participated in a discussion about music royalties for broadcasters at the Texas Association of Broadcasters Annual Convention in Austin. Speaking on the panel with me were the heads of the Radio Music License Committee and the TV Music Licensing Committee. These are the organizations that represent most commercial broadcasters in their negotiations with ASCAP, BMI and SESAC for public performance licenses for “musical works” or “musical compositions” – the underlying words and music to any song. In our discussion, there was a general summary of the licenses needed for the use of music by broadcasters, a summary of the status of some of the current royalty negotiations, and questions about other issues in music licensing. As this discussion raised a number of issues that I have covered in articles posted on this blog, I thought that it might be worth highlighting some of that past coverage so that those interested in any topic can read a bit more on these subjects.

The TV industry seems to have far fewer issues than radio, perhaps because radio is so much more music-dependent. While there is music in many TV programs, some of it is cleared (i.e. licenses have been negotiated) by the program providers (including some networks), so that stations need only worry about licenses for programming where the music has not been pre-cleared. Thus, TV stations have alternatives of blanket licenses for all programming (principally used by affiliates of networks where music has not been pre-cleared) or per-program fees where stations pay for music only in programs or program segments where music has not been licensed by the program suppliers.
Continue Reading Looking at Music Royalty Issues for Radio and TV Broadcasters

ASCAP and the Radio Music License Committee (RMLC) announced yesterday that they have reached an agreement for the period 2017-2021, setting the performance royalties that commercial broadcasters will pay for the use of music written by composers who are represented by ASCAP. The press release issued yesterday discloses little about the details of the agreement.…

The “performing rights organizations” – ASCAP, BMI and SESAC – don’t get as much attention in these pages as do the royalties paid to SoundExchange for the use of “sound recordings.” The PROs collect for the public performance of the “musical work” or the musical composition – the words and music of a…

Radio broadcasters have been receiving invoices from the Radio Music License Committee (“RMLC”), and many are asking whether the invoice is “real.”  Some stations seem concerned that they are being asked to pay some fee that they really don’t owe. The truth is that this is one bill that most commercial stations in fact do owe, and it is a bill that they should actually be happy to pay. RMLC is the committee that represented radio broadcasters in the recent negotiations with ASCAP and BMI, leading to new agreements covering the royalties to be paid to these organizations through 2016. We wrote about the ASCAP agreement, here. The BMI agreement was announced recently, and we’ll try to get a summary of that agreement up on the blog sometime soon. These settlement agreements significantly reduced the amount of royalties that the radio industry as a whole pays to ASCAP and BMI for the public performance of musical compositions on over-the-air radio (and in connection with their digital uses of music as well).   As part of these settlement agreements, the Court overseeing the antitrust consent decrees with ASCAP and BMI, which had to approve the settlements, approved the fees to RMLC as well. 

Under the terms of the Court approval, all stations that either elected to be represented by RMLC in the negotiations (see our article on that election here), or those who elect to be covered by the settlement by signing an agreement with ASCAP and BMI under the terms that RMLC negotiated, are required to pay the fee to RMLC.  The fee funds RMLC operations in the future, and pays for the cost of the litigation and negotiations that led to the settlements.Continue Reading What is the RMLC, And Why Should a Radio Station Pay Their Bill?

ASCAP and the Radio Music Licensing Committee have reached a settlement on the amount that radio stations will pay to ASCAP for the use of music for the period through the end of 2016. The agreement was approved last week by the US District Court in the Southern District of New York acting as a “rate court” to consider those fees. We reported that a settlement had been reached in early December, and now we’ve seen the actual documents and can provide some details of this agreement between the commercial radio broadcast industry and ASCAP. It should result in significant savings for broadcasters from rates that they had been paying prior to January 1, 2010.

As we wrote in 2010 when RMLC and ASCAP were first trying to reach a deal on new rates, the biggest problem with the old rates was the payment structure. Rather than making ASCAP a partner of the broadcaster by cutting them in for a percentage of the broadcaster’s revenue, under the deal that ended in 2009, ASCAP was to receive a set fee each year from the broadcast industry.  That set fee was divided among all commercial radio stations not based on station revenues, but instead based on the market size and technical coverage of each station. So all similarly powered stations in a market paid the same ASCAP fee, whether they were big revenue producers or not.  And the agreement was entered into during a period where radio broadcasters thought that revenues would be ever-increasing, so that set fee to be paid to ASCAP increased each year. As the economy and broadcast revenues fell during the later years of the deal, while the set fee kept increasing,broadcasters were paying an ever-increasing percentage of their revenues to ASCAP – far more than would have been paid had the industry stuck to a percentage of revenue formula.

Well, the experiment is over, as the new deal returns to a traditional percentage of revenue deal. Music radio pays ASCAP 1.7% of “revenues subject to fee from radio broadcasting." Essentially, that is all the revenue that a station receives from advertising and promotions, less a 12% deduction (presumably to cover commissions and costs of collection). Barter revenues, and payments made to networks (as opposed to the stations themselves), are excluded from the gross revenue calculation. All revenues from HD programming (including any amounts received for brokered programming) is also included (at least for the time being – subject to reevaluation should HD revenues account for 25% of radio revenues by 2015). New Media revenues, if the arise exclusively from streaming your station on the Internet, are also included in this gross revenue calculation.Continue Reading Details of the ASCAP Settlement with the Radio Industry – What Will Your Station Pay?