The recent settlement on Internet radio royalties between Sirius XM Radio and SoundExchange provides yet another option for commercial webcasters trying to determine the royalties to be paid for the public performance of sound recordings.  While the settlement is signed by just these two parties, it will be published in the Federal Register and be available for all commercial webcasters who comply with its terms – which will essentially be any webcaster who is not a "Broadcaster" as defined in the NAB Settlement, about which we wrote here.  As set forth below, the royalty rates available under this settlement are slightly lower for 2009 and 2010 than those set by the Copyright Royalty Board back in 2007, but slightly higher than those available under the NAB settlement.  However, in 2013-2015, the rates available under this deal are actually lower than those agreed to by the NAB, meaning that they present a better deal for webcaster expecting their audiences to grow in the next few years.

First, the most important issue – how much will it cost?  As with the CRB decision, the NAB deal, and the Pureplay deal (about which we wrote here) as it applies to large pureplay webcasters, the rates established by the deal are based on a "per performance" charge.   A performance is one song as listened to by one listener.  So if a song is played on an Internet radio station subject to the deal and 100 people are listening at the time the song is played, there are 100 performances.  The rates established by the deal are as follows:

           Year              Rate per Performance

2009                      $0.0016

2010                      $0.0017

2011                      $0.0018

2012                      $0.0020

2013                      $0.0021

2014                      $0.0022

                        2015                      $0.0024

Continue Reading Details on Sirius XM and SoundExchange Settlement on Internet Radio Royalties – An Option for Some Commericial Webcasters

On Tuesday, just before the Senate recesses for its summer vacation, an abridged version of the Senate Judiciary Committee held a hearing on the proposed sound recording performance royalty for over-the-air radioInternet radio royalties were also encompassed in this discussion, principally concerning the issue of "platform parity", i.e. whether all music services subject to the sound recording performance royalty should pay a royalty determined by the same standard, or perhaps even the same royalty.  We’ve already written this week about some of the issues surrounding the broadcast performance royalty (why it’s still being considered given that a majority of the House of Representatives has already signed a resolution against the royalty, here, and discussing the likely amount of the royalty were it to be adopted, here).  Neither of these issues was discussed in depth at the hearing.  But a multitude of other issues were raised in the hearing. and we’ll address many of them over the next few days.  But first, today, a summary of the issues raised.

First, it should be made clear that there was not a full committee in attendance.  While a few Senators came and went without saying a word, questions were asked or comments made by only 5 Senators of the 19 on the Committee.  So judging how the full committee feels about the issues raised when only 5 Senators (4 of them Democrats) asked questions may not be a fair assessment of how the committee as a whole feels about the issues raised.  But, broadcasters should take warning that all of the Democratic Senators in attendance seemed to be sympathetic to the idea of adopting a broadcast performance royalty.  However, it must be noted that all also seemed somewhat sympathetic to the concerns about the financial impact of the royalty on broadcasters.  Just as members of the House have cautioned broadcasters to negotiate on a royalty before one is imposed on them, Senator Leahy of Vermont, the Chairman of the Committee, echoed those sentiments, promising that "legislation will move" on this issue – meaning that the issue will not simply fade away, despite the signatures on the NAB petition opposing the performance royalty.

Continue Reading Senate Judiciary Committee Hearing on Radio Performance Royalty and Platform Parity for Webcaster Royalties

A recent Washington Post article highlights a bill that was recently introduced in Congress suggesting that the FCC bring back their rules for audio descriptions of video programming – rules which were thrown out by the Courts several years ago as being beyond the scope of the Commission’s authority without explicit Congressional authorization.  But not only does this bill propose to give that missing Congressional approval to the FCC to re-introduce video description requirements for broadcast television, but it would authorize the FCC to introduce these rules, and closed-captioning requirements, on all video screens, including MP3 players, wireless devices and other video devices getting their programming through the Internet or other digital technologies.  With this bill, and various other proposals that have surfaced in recent months, it seems more and more likely that, as the Internet becomes even more important in the provision of broadcast-like programming in the future, the FCC may be called on by Congress to impose broadcast-like restrictions on that programming.

The full text of the recent bill, introduced by Congressman Markey, Chair of the House Subcommittee on Telecommunications and the Internet, can be found here.  A summary of the bill is also available on Congressman Markey’s website.  The bill deals first with the accessibility of telephones and other communications devices, before setting out the provisions dealing with the captioning and video description requirements for broadcast and Internet video devices.  The bill first asks the FCC to study and report to Congress on the issues with captioning and video description on video devices, and then asks the FCC to adopt rules governing these matters, making video programming placed on the Internet that was either broadcast on a television stations or which is "comparable" to broadcast programming to be subject to these rules.  The idea is to make all TV-like programming subject to the rules, no matter what device it is viewed on.  Presumably, if adopted, the law would allow the FCC to make exemptions for certain types of programming (just as it currently allows exemptions from the current closed captioning requirements for small entities that have insufficient resources to caption a program).  The bill also requires that the FCC make sure that program guides and emergency information are available to those with hearing or visual difficulties, and that the navigation devices on video receivers can  be worked by those with disabilities.  So the FCC would have much to do to comply with this law, if adopted, and all within an 18 month period.

Continue Reading Closed Captions and Video Description – The First Step to FCC Regulation of On-Line Media?