cost-of-living increase in webcasting royalties

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Here are some of the regulatory developments of significance to broadcasters from the past two weeks, with links to where you can go to find more information as to how these actions may affect your operations.

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In Federal Register notices published this week, the Copyright Royalty Board announced cost-of-living increases for two sets of music royalties.  Webcasters, including broadcasters streaming their signals on the web or through mobile apps, will be paying more to SoundExchange for the public performance of sound recordings.  In addition, noncommercial broadcasters affiliated with educational institutions, but not affiliated with NPR or CPB, will be paying more to SESAC and GMR for their over-the-air broadcasts.  These changes go into effect on January 1, 2024.  More information about each of these royalties is set out below. 

The webcasting royalties that are increasing are those that are paid to SoundExchange by those webcasters making “noninteractive digital transmissions” of sound recordings (see our article here on the difference between interactive and noninteractive transmissions).  This includes broadcasters who simulcast their over-the-air programming on the internet or through mobile apps (or through other digital means including smart speakers like Alexa, see our article here).  The notice just published in the Federal Register sets out the computations that the Board used to determine the amount of the cost-of-living increase.  Those computations led to a royalty rate for 2024 of $.0025 per performance for services that do not charge a subscription fee. A performance is one song played to one listener – so for one song paid to four listeners one time each, a webcaster pays a penny. For subscription services, the rate will be $.0031 per performance.  This represents an increase from the 2023 rates of $.0024 for nonsubscription performances and $.0030 per performance for subscription stream. Continue Reading Cost of Living Increases Announced for Music Royalties Paid by Webcasters to SoundExchange and by Noncommercial Broadcasters to SESAC and GMR

In a very busy week, here are some of the regulatory developments of significance to broadcasters from the past week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The Federal Trade Commission and seven state Attorneys General announced a settlement with Google LLC and iHeart Media, Inc. over allegations that iHeart radio stations aired thousands of deceptive endorsements for Google Pixel 4 phones by radio personalities who had never used the phone.  The FTC’s complaint alleges that in 2019, Google hired iHeart and 11 other radio broadcast companies to have their on-air personalities record and broadcast endorsements of the Pixel 4 phone, but did not provide the on-air personalities with the phone that they were endorsing.  Google provided scripts for the on-air personalities to record, which included lines such as “It’s my favorite phone camera out there” and “I’ve been taking studio-like photos of everything,” despite these DJs never having used the phone.  The deceptive endorsements aired over 28,000 times across ten major markets from October 2019 to March 2020.  As part of the settlement, subject to approval by the courts, Google will pay approximately $9 million and iHeart will pay approximately $400,000 to the states that were part of the agreement.  The settlement also imposes substantial paperwork and administrative burdens by requiring both companies to submit annual compliance reports for a period of years (10 years in the case of iHeart), and create and retain financial and other records (in the case of iHeart, the records must be created for a period of ten years and retained for five years).
    • This case is a reminder that stations must ensure that their on-air talent have at least some familiarity with any product they endorse, particularly where on-air scripts suggest that they have actually used the product.  Stations should not assume that talent know the relevant rules – they more likely will just read whatever is handed to them without understanding the potential legal risk for the station, which, as demonstrated in this case, could be significant.

Continue Reading This Week in Regulation for Broadcasters: November 26 to December 2 , 2022