We are waiting on the Copyright Royalty Board to release its decision setting the royalties that webcasters (including broadcasters who simulcast their over-the-air programming on the Internet) will pay to SoundExhange for the public performance of sound recordings in the period 2021 through the end of 2025.  As we wrote here, that decision would normally have been released in December but, as the trial to establish those rates was delayed by the pandemic and held virtually over the summer, the decision on rates could come as late as this April, though once effective it will be retroactive to all streaming that has occurred since January 1 of this year.  While we await the announcement of the new rates, as I’ve recently received several questions about the rules that apply to streaming under the statutory license, I thought that I would take a quick look at the “performance complement” and other rules that apply to companies that rely on this license.

Note that the rules set out below are slightly different for certain broadcasters, as the NAB in 2016 entered into agreements with Sony and Warner Music Groups to waive certain of the statutory requirements for broadcasters who stream their over-the-air signals on the Internet.  These agreements allow broadcasters to stream their normal over-the-air programming featuring music from these labels without having to observe all of the obligations set out below.  We summarized those waivers here, and hope that they will be further extended to cover the new royalty term.  Also, some big webcasters have negotiated relief from these requirements (see our article here).  But for those not subject to a waiver, let’s look at some of the rules that webcasters relying on the statutory license are to observe.
Continue Reading Looking at the Performance Complement and Other Rules that Apply to Webcasting Companies Relying on the Sound Recording Statutory License

Should artists waive their rights to performance royalties in order to get airplay on broadcast or Internet radio stations? That questions has come to the fore based on a click-through agreement that Clear Channel included on a website set up to allow independent bands to upload their music for consideration for airplay by its stations. While artist groups, including the Future of Music Coalition, condemned that action, there are always two sides to the story, as was made clear in a segment broadcast on NPR’s Morning Edition, in which I offered some comments. As set forth in that segment, artists may be perfectly willing to allow unrestricted use of a song or two in order to secure the promotional value that may result from the airplay that might be received. For the broadcaster or Internet site seeking such permission, getting all rights upfront may well be an important consideration in deciding whether or not to feature a song – especially in the digital media.

Critics of the waiver made much of the fact that the site was set up at least partially to meet Clear Channel’s informal commitment made as part of the FCC payola settlement to feature more independent music, even though that commitment was not a formal part of the settlement agreement.  (See our summary of the payola settlement, here).  Even to the extent that the informal commitments made by the big broadcasters encompassed making time available to more independent musicians, the critics ignore the fact that the companies do not need any waiver of any sound recording performance royalty in connection with the over-the-air broadcast of those songs, as there currently is no public performance right in a sound recording for over the air broadcasting (though artists and record lables are now pushing for such a royalty, see our story here). Thus, the use of the waiver was only for the digital world – which was not covered by the FCC’s jurisdiction over payola promises or the promises to increase the use of independent music. So, effectively, the company is being chastised for trying to minimize their costs on giving the music even greater circulation through their digital platforms than they initially promised.


Continue Reading Musicians Trade Waiver of Royalty Rights in Exchange for Exposure – Maybe Not Such a Bad Idea