Extensions of time were just announced in two proceedings affecting music licensing – one a Copyright Office proceeding studying music licensing generally, and another a Copyright Royalty Board proceeding on webcasting recordkeeping. Only a week after announcing that it would take another round of comments on its music licensing study, the Copyright Office announced an
We’ve already written twice about the copyright issues being considered this summer before various agencies and branches of government – all dealing with music licensing issues (see our previous Summer of Copyright articles here and here). The pattern continues, as the Copyright Office has now requested further comments on music licensing issues, following up on its roundtables held across the country during the month of June to discuss its music licensing inquiry begun in the spring (see our summary of the initial Copyright Office notice on its study, here). In yesterday’s Federal Register, there is a notice asking a series of questions about specific issues that were raised in the roundtables which the Office apparently finds to be of significance. Additional comments on these issues, and on any related issues affecting music licensing, are due on or before August 22.
What are the questions being asked by the Copyright Office, and what do they portend for its ultimate recommendations to Congress who, as we recently wrote, is itself considering music licensing issues and the potential for a comprehensive reform of music licensing in this country? The areas in which the questions are being raised are not new ones, but instead continue the themes raised in other forums this summer. They include questions as to how withdrawals of major publishers from the Performing Rights Organizations (ASCAP and BMI in particular) could affect those organizations. We first wrote about potential publisher withdrawals and the impact that could have on music services back in 2011. Also, on a related question, they ask why, when these organizations have collected record amounts of money in recent years, songwriters are complaining that they are economically struggling. In addition, questions are asked about the procedures used by the Copyright Royalty Board in their rate-setting process and whether those procedures should be revised, how better identification of musical works and sound recordings could be adopted to make recordkeeping and royalty administration easier, how a system of setting mechanical royalties could work without a statutory license, and whether there are international licensing models that might be adaptable to the US market. Some details below.…
Continue Reading The Summer of Copyright, Part 3 – The Copyright Office Requests Further Comments in its Inquiry on Music Royalties and Licensing
This is the summer of copyright – as seemingly every government agency with any connection to media issues is looking at music licensing and other copyright issues. Much press was given to the House Judiciary Committee hearing held last week. But the Congressional committee’s consideration of copyright issues is but one of the many places where issues of importance to broadcasters and digital media companies are being reviewed. The Copyright Office is doing its own review of the music royalty landscape (see our articles here and here), and I had the privilege of participating in their first roundtable discussion of these issues in Nashville the week before last. Also holding hearings on copyright issues is the Commerce Department in connection with their Green Paper, which we summarized here and here. The Copyright Royalty Board is starting its consideration of the recordkeeping requirements for webcasters and other digital music users (here and here), and also has begun the proceeding to determine the rates to be paid by webcasters for the public performance of sound recordings for the period of 2016-2020 (here and here). And there is proposed legislation on pre-1972 sound recordings (the RESPECT Act), songwriters’ royalties (the Songwriters Equity Act) and another bill proposing to limit the collection of retransmission consent fees by TV companies that also own radio stations and don’t pay performance royalties to musicians. On top of all that, law suits are pending in various courts on these and related issues, and the Department of Justice just announced a proceeding to review the consent decrees governing ASCAP and BMI that have been in place for over 50 years. I could easily cover nothing but music issues on this blog, and still not have enough time to write about all the pending proceedings, much less any new ones that may arise as I’m trying to catch up on all that has gone before. But let’s start with one of the fundamental issues driving a significant part of this review.
Perhaps surprisingly, one of the principal drivers of much of this review of the Copyright laws is not whether there should be a performance royalty for sound recordings paid by broadcasters to record companies and performers for music played over the air, or even issues about the amount of royalties paid to recording artists and labels in the digital world – though much of the trade press (particularly the broadcast trade press) seems to focus on these issues, and to present them as the drivers of all of these reform proposals. Certainly these issues are alive and important – but the area where there seems to be the most passion, and the strongest lobbying effort for copyright reform of music licensing deals not with performers and labels, but instead with the amounts that songwriters get paid for their use of music – with the debate focusing on how much they get paid by digital services for music streaming, and by the record labels for making “reproductions” of their compositions.…
Continue Reading The Summer of Copyright and Music Licensing Part 1 – Songwriters Demand A Bigger Share
The Copyright Royalty Board today published in the Federal Register its notice announcing the commencement of the next proceeding to set webcasting royalty rates for 2016-2020. The Notices (here for webcasting and here for “new subscription services” – subscription webcasting and other similar pay digital music services, other than satellite and cable radio whose royalties were set in another proceeding about which we wrote here) were notable as they were not simply an announcement that the proceedings were beginning and a recitation of the procedure for filing a petition to participate (essentially a written filing setting out a party’s interest in the outcome of the proceeding and the payment of a $150 filing fee). Instead, the order sets out a series of questions for consideration by potential participants, asking that they consider some fundamental issues about the nature of the royalty to be adopted in this proceeding. Petitions to participate must be filed by interested parties with the CRB by February 3.
The questions asked by the Judges really revolve around two issues that have been raised many times in prior proceedings. These questions are noteworthy only because the Judges are asking the parties to consider whether the CRB should address issues that have been litigated in prior proceedings – issues that some might have considered to be settled by these prior cases. First, the Judges ask if the CRB would be justified in adopting a percentage of revenue royalty, rather than the per song, per listener royalty metric that has been used in the three prior proceedings. Asking that question raises several other sub-issues that are set out in the orders including:
- Whether it is too difficult to determine what the revenues of a webcaster are, an issue that can be troublesome if the webcaster has multiple lines of business where determining which revenues are attributable to webcasting and which are attributable to other services might be complicated (though collection agencies like ASCAP and BMI are able to administer their royalty schemes, usually using a percentage of revenue rate).
- Whether a percentage of revenue royalty is unfair to the artists because it does not pay each artists an equivalent amount for each song that is played, thought the Judges ask parties to address whether all music is worth the same amount (see our article here about the difficulty in assessing the value of music and the controversies that it raises).
- Whether a percentage of revenue royalty encourages the webcaster to use too much music, as services not paying on a per song per listener basis might not need to be efficient in monetizing their music use unless, as suggested by the Board, there are substantial minimum fees adopted to encourage the webcaster to make money off of its use of the music.
In addition, the Board asks if there should be different rates for different types of webcasters – are some more efficient than others? Can royalties be maximized by “price discrimination” – charging less to certain webcasters to get whatever can be received from them, while charging a higher royalty rate to other services that can afford to pay more? In effect, there has been price discrimination in the webcasting market, but such discrimination has come about after there have been decisions perceived as adverse to webcasters, when webcasters and SoundExchange have come together, often as the result of political pressure, to negotiate alternative rates pursuant to a Webcaster Settlement Act (or the Small Webcaster Settlement Act in the initial proceeding). See our summary of the differing royalty rates currently paid by webcasters pursuant to these negotiated deals, here. …
Continue Reading Copyright Royalty Board Calls for Petitions to Participate in Proceeding to Set Webcasting Royalties for 2016-2020 – Posing Many Questions for Potential Participants
The Copyright Royalty Board makes many important decisions, yet for the last several years, there has been a cloud over its operations, as there have been questions as to whether its members were constitutionally appointed (see our articles here, here and here). Well, the question is before the Courts again – this time squarely in front of the US Court of Appeals for the District of Columbia – a Court one step below the Supreme Court. The Copyright Royalty Board sets the royalty rates to be paid by Internet radio stations for the public performance of sound recordings, and in doing so, they have made some controversial decisions over the last few years. They also set royalties for other digital non-interactive music services, including Sirius XM, music services that come with cable and satellite television services, and background music services. The Board also oversees the distribution of funds that are collected for the retransmission of distant television signals by cable systems. It also sets the rates under Section 115 of the Copyright Act for the reproductions of musical compositions made by record companies when producing musical recordings or downloads, by digital music companies in connection with on-demand music services, and by wireless carriers in selling ringtones.
The case before the Court involves a seemingly small matter – the appeal of Intercollegiate Broadcasting Services from the CRB decision setting default rates for Internet radio services that are not covered by one of the many Webcaster Settlement Act agreements (about which we wrote here and here). IBS essentially is objecting to the fact that the Board would not lower the annual minimum royalty fee paid by some of IBS’ smaller members below $500. But, in connection with its appeal, IBS raised the issue of the constitutionality of the appointment of the Judges, and the Court this week heard an oral argument on the issue – mentioning the rate questions only in passing while concentrating on the constitutionality of the appointment of the Judges.
Dave Oxenford this week conducted a seminar on legal issues facing broadcasters in their digital media efforts. The seminar was organized by the Michigan Association of Broadcasters, and originated before a group of broadcasters in Lansing, but was webcast live to broadcasters in ten other states. Dave addressed a variety of legal issues for broadcasters in connection with their website operations and other digital media platforms. These issues included a discussion of service marks and copyrights, employment matters, music on websites, the use of social media, privacy, and sponsorship disclosure. The slides used in the Lansing presentation are available here. During the seminar, Dave also mentioned that stations with websites featuring user-generated content, to help insulate themselves from copyright infringement that might occur in the content posted to their website by their audience, should take advantage of the registration with the Copyright Office that may provide safe harbor protection if a station follows the rules and takes down offending content when identified by a copyright holder. The Copyright Office instructions for registration can be found here.
One of the most common issues that arise with radio station websites is the streaming of their programming. In August, Dave gave a presentation to the Texas Association of Broadcasters providing a step-by-step guide to streaming issues, with a summary of the royalty rates paid by different types of streaming companies. That summary to Internet Radio issues is available here. Additional information about use of music on the Internet can be found in Davis Wright Tremaine’s Guide to The Basics of Music Licensing in a Digital Age. Dave also presented this seminar at the Connecticut Broadcasters Association’s Annual Convention in Hartford on October 14.
Broadcasters have a host of other legal issues that they should consider in connection with their digital presence. At last week’s Maine Association of Broadcasters Annual Convention in Bangor, Dave Oxenford addressed these issues, including service marks and copyrights, employment matters, music on websites, the use of social media, privacy and sponsorship disclosure. A copy of Dave’s presentation on the Legal Issues…
In the last two weeks, David Oxenford has, at two different conferences, moderated panels on digital music rights and licenses. At the Digital Music Forum East, in New York City on February 25, 2010, his panel focused on rights and licenses generally, featuring panelists from SoundExchange, BMI, the Harry Fox Agency, Rightsflow and MediaNet. …
SoundExchange has posted on its website this afternoon four press releases announcing new settlements of amounts due for Internet radio music royalties. These settlements were negotiated under the provisions of the Webcaster Settlement Act of 2009. The announcement lists settlements with two noncommercial groups representing College Broadcasters and noncommercial religious broadcasters, as well as a deal with Sirius XM for their streaming of music. The fourth deal is with a group to be named later – a little mystery that sounds like something out of a trade of baseball players done right at the trading deadline. In effect, that is the case here, as yesterday was the final date for deals to be done under the terms of the WSA. These deals join the Pureplay Webcasters settlement announced earlier this month, as well as the deals with the Corporation for Public Broadcasting for NPR affiliates, the NAB for commercial broadcasters, and with microcasters done in February under the terms of the Webcasters Settlement Act of 2008 (links to our description of these deals can be found here).
The press releases do not release detailed terms. For Sirius, the release states that the parties agreed to a per performance rate which is not specified, covering webcasting royalties through 2015. These rates do not apply to Sirius performances that are done by satellite, which are covered by the Copyright Royalty Board rates recently upheld by the US Court of Appeals. Instead, these rates only cover the streaming of Sirius programming done over the Internet or to mobile devices using Internet technology. The Collegiate Broadcasters agreed to a rate that provided the flat $500 fee for the first 159,140 aggregate tuning hours a month set by the CRB decision, and then per performance fees at the NAB rates for all streaming above that amount. The religious broadcasters deal is less defined, discussing a per performance rate, but not providing any more details of the agreement. For both noncommercial groups, there are references to reduced recordkeeping requirements for some webcasters, but again, those have not yet been detailed.
The Pureplay Webcasters settlement agreement, which we summarized here, was published in the Federal Register on Friday, starting the 30 day clock running for the election of the deal by existing webcasters. While this deal offers better per performance rates to large webcasters than offered by the rates established by the Copyright Royalty Board, and higher permissible listening levels to Small Commercial Pureplay webcasters than allowed under the Microcaster deal, this option still is not for everyone. For larger webcasters, there is a minimum fee of 25% of total revenue, so companies with multiple lines of business will not want to opt into the deal. For smaller webcasters, the fees are higher than under the Microcaster deal, including a $25,000 minimum yearly fee, and there are per performance rates that are charged when the webcaster offers services that are "syndicated," i.e. played through a website other than that of the webcaster itself. So electing this deal is right only for larger "small pureplay" webcasters who have revenues over $250,000 (where they will be paying royalties in excess of the $25,000 minimum fee under any deal) and those entities nearing the audience caps of the Microcaster deal. Nevertheless, for those webcasters who fit within the constraints of the deal, it offers benefits over the other existing options. The opt-in date set by the deal is August 17, 2009. The forms to opt into the the Small Pureplay webcasters agreement are here. The forms for larger Pureplay webcasters are here.
Note that this is just one of many options available to webcasters, each tailored to webcasters of specific types. Noncommercial webcasters associated with NPR or the Corporation for Public Broadcasting have their own deal, where essentially CPB pays the royalties. See our description of this deal, here. Streaming done by broadcasters, who would not want to take the "pureplay" deal as their broadcast revenues would be subject to the royalties, have their own settlement agreement, which we described here and here, setting out per performance rates different than those arrived at by the CRB. Small commercial webcasters can elect the "Microcaster" deal, which we described here. And for those entities that don’t fit under any of these categories, they will have to pay the CRB rates, which we described here and here. The Radio and Internet Newsletter recently ran a good, basic summary of these alternatives, here. Note that there still is another two week period where, under the Webcaster Settlement Act of 2009, agreements can be reached with SoundExchange by other webcaster groups to potentially pay rates that are different from any of those agreed to so far.