copyright royalty board

The Copyright Royalty Board today published a Federal Register notice announcing that SoundExchange was auditing a number of broadcasters and other webcasters to assess their compliance with the statutory music licenses provided by Sections 112 and 114 of the Copyright Act for the public performance of sound recordings and ephemeral copies made in the digital transmission process by commercial webcasters. A separate notice to audit the company Music Choice, which also provides a digital music service usually delivered with cable or satellite television services, was also issued to audit their compliance both on webcasting and on their subscription music service which is subject to separate royalty rules set out in a different part of the same section of the Copyright Act and set through a different Copyright Royalty Board proceeding. A third audit notice has gone out to a company called Rockbot, a Business Establishment Service whose royalties are exclusively paid under Section 112 of the statute (see our article here about the CRB-set royalties for these services that provide music played in various food and retail establishments and other businesses).

SoundExchange may conduct an audit of any licensee operating under the statutory licenses for which it collects royalties.  Such audits cover the prior three calendar years in order to verify that the correct royalty payments have been made. The decision to audit a company is not necessarily any indication that SoundExchange considers something amiss with that company’s royalty payments – instead they audit a cross-section of services each year (see our past articles about audits covering the spectrum of digital music companies audited by SoundExchange here, herehere and here).  Audits are conducted by outside accounting firms who, after they review the books and records of the company being audited, issue a report to SoundExchange about their findings.  The company being audited has the right to review the report before it is issued and suggest corrections or identify errors.  The reports are then provided to SoundExchange and, if they show an underpayment, it can collect any unpaid royalties, with interest.  While, by statute, the notice of the royalty must be published in the Federal Register, the results of the audit and any subsequent resolution usually are not made public.
Continue Reading Copyright Royalty Board Announces SoundExchange Audits of Royalty Payments for Webcasters (Including Broadcast Simulcasts) and Other Digital Music Services

A decision was expected in December on the royalties to be paid by broadcasters and other digital media companies who stream their non-interactive audio programming on the Internet.  As we wrote at the beginning of the pandemic, the Copyright Royalty Board, which hears the arguments about the royalties to be paid to SoundExchange in a trial-type administrative hearing, had to postpone the hearing that was initially slated to begin in March.  That hearing will now begin later this month.  Because of the delays in the hearing caused by the pandemic, Congress authorized the Copyright Office to extend various statutory deadlines.  This week, the Copyright Office announced that the December deadline for a decision on webcasting royalties has been pushed until April 15, 2021.

This does not mean that the royalties themselves will not go into effect on January 1.  The current CRB proceeding is to determine the rates that will be in effect for 2021 through 2025.  The proceeding began early in 2019 (see our posts here and here).  The January 1 effective date for the new royalties remains in place, so any decision released later in 2021 will be retroactive.  In January, webcasters and other internet radio operators will pay the royalties currently in place, and there will be some mechanism for a true up of the amounts due once the decision becomes effective.  That is not unusual in the music royalty world.  Just a few months ago, the Radio Music License Committee reached an agreement with BMI on royalties that was retroactive several years.  The Copyright Royalty Board decisions themselves, even if released to the parties in December, are often not final until the next year as the public version of any CRB decision usually takes time to release, and the parties have time after a decision is released to seek edits to the decision.  The Copyright Office itself also reviews the CRB decision for legal errors.  Even after that, the decision can be appealed to the Courts, so the ultimate resolution may be unknown for years – yet parties conduct their business while waiting to see if any adjustments to fees already paid may be due at some later time.
Continue Reading Copyright Office Extends Until April Date by Which Decision on SoundExchange Royalties for 2021-2025 Must be Released

Music licensing issues are always confusing.  At the request of streaming service provider Live365 which hosted World Audio Day as a virtual substitute for our all getting together at last month’s cancelled NAB Convention in Las Vegas, I participated in a discussion of those issues, trying to provide the basics as to who gets paid

The judge presiding over the royalty litigation between BMI and the Radio Music Licensing Committee (RMLC) approved the settlement between these parties by an order released on March 23.  At the same time, the judge approved an order keeping the specifics of the approved settlement confidential for 30 days while the settlement is being implemented

Most years, at some point in January, we look into our crystal ball and try to see some of the legal and regulatory issues likely to face broadcasters.  We already provided a calendar of the routine regulatory filings that are due this year (see our Broadcaster’s Regulatory Calendar).  But not on that calendar are the policy issues that will affect the regulatory landscape in the coming year, and into the future.  This year, the biggest issue will no doubt be the November election.  Obviously, broadcasters must deal with the many day-to-day issues that arise in an election year including the rates to be charged political candidates, the access to airtime afforded to those candidates, and the challenges associated with the content of issue advertising that non-candidate groups seek to transmit to the public.  The election in November will also result in a President being inaugurated in just less than a year – which could signal a continuation of the current policies at the FCC or potentially send the Commission in a far different direction.  With the time that the election campaigns will demand from Congress, and its current attention to the impeachment, Congress is unlikely to have time to tackle much broadcast legislation this year.

The broadcast performance royalty is one of those issues likely on hold this year.  While it was recently re-introduced in Congress (see our article here), it is a struggle for any copyright legislation to get through Congress and, in a year like the upcoming one, moving a bill like the controversial performance royalty likely will likely not be high on the priorities of Congressional leaders.  This issue will not go away – it will be back in future Congresses – so broadcasters still need to consider a long-term strategy to deal with the issue (see, for instance, our article here on one such strategy that also helps resolve some of the music royalty issues we mention later in this article).
Continue Reading Looking Ahead to the Rest of 2020 – Potential Legal and Regulatory Issues For the Remainder of the Year

Late last month, the Ask Musicians For Music Act (the “AMFM Act”) was introduced in both the House and Senate. If enacted, the AMFM Act would impose on over-the-air broadcast radio stations a performance royalty for the use of sound recordings in their programming. This is yet another bill proposing that the current royalty that requires that digital music services pay royalties both for the use of musical compositions (as already paid by broadcasters) and the sound recording (currently paid by broadcasters only for the Internet streams of their programming) be extended to cover all over-the-air broadcasts by radio stations. Extending the sound recording performance royalty to over-the-air radio has been proposed many times before (see, for instance, our articles hereherehere and here), but this is the first time that the proposal has been advanced in the current session of Congress. Similar bills were introduced last session before the 2018 elections but were never brought to a vote in either the House or the Senate – see our post here.

As we’ve written before, the royalties that broadcasters pay to ASCAP, BMI, SESAC and even GMR are paid to the composers of music (and the copyright holders in the musical compositions, usually a publishing company). Sound recording royalties are paid to the performers (and the copyright holders in the performances, usually the record labels). These are the royalties that broadcasters pay to SoundExchange when they stream their programming on the Internet. Historically, in the US, broadcasters and other businesses who play sound recordings are not subject to a performance royalty for the use of those sound recordings (except for digital audio music services who do pay sound recording performance royalties in the US), though such royalties are paid in many other countries in the world. This bill proposes to make broadcasters pay for their over-the-air performances. Under the provisions of the bill, the Copyright Royalty Board would set these royalties along with those paid by digital audio services, and the royalties would be paid to SoundExchange.
Continue Reading AMFM Act Introduced in Congress to Impose Sound Recording Performance Royalty on Broadcast Stations

With the Copyright Royalty Board now in the early stages of the next proceeding to consider webcasting royalties (see our article here) as well as other proceedings including the distribution of cable and satellite television royalties to TV programmers (see these CRB notices), the Chief Judge of the CRB, Suzanne Barnett, announced her

Last week, we noted that the Copyright Royalty Board had a notice on its website saying that, because of the government shutdown, it could not publish its notice soliciting petitions to participate in WEB V, the case to set webcasting royalties paid to SoundExchange by noninteractive webcasters (including broadcasters who simulcast their programming on the

Update – January 24, 2019 – the notice seeking petitions to participate has been published in the Federal Register, setting a filing deadline of February 4, 2019.  See our article here for more details.

In our summary of January regulatory issues for broadcasters, we suggested that the Copyright Royalty Board this month might start

In one of those year-end decisions that got lost in the holiday rush, in late November, the Copyright Royalty Board issued its final ruling on the rates to be paid to SoundExchange by “business establishment services” for the ephemeral copies of sound recordings when these music services transmit programming to their customers. We wrote about the CRB’s proposal to adopt these rules in May of last year, and our comments on the decision remain relevant to explaining this order. A slightly revised version of our May post follows.

While Copyright Royalty Board decisions on royalties for webcasters, Sirius XM and mechanical royalties get most of the attention, the CRB also sets rates paid by “business establishment services” for the “ephemeral copies” made in their music businesses. Business establishment services are the companies that provide music to businesses to play in retail stores, restaurants and other commercial establishments. These services have come a long way from the elevator music that once was so derided – and now set the mood in all sorts of businesses with formats as varied as the commercial businesses themselves.  While the rates paid by these services pay for music rights is a little off-topic for this blog, these rates are a bit unusual, so they are worth mentioning.  The Copyright Royalty Board in May announced a proposed settlement between the services that were participating in the CRB case and SoundExchange which will raise the rates gradually from the current 12.5% of revenue to 13.5% over the next 5 years, with a minimum annual fee of $20,000, up from $10,000. These rates, which apply to any company that does not negotiate direct royalties with the sound recording copyright holders, went into effect on January 1, 2019 and will be in place through 2023.
Continue Reading Copyright Royalty Board Final Decision on Rates for Business Establishment Services