RMLC

Subscribe to RMLC

It was announced this week that SESAC’s royalties for radio for the period starting at the beginning of 2016 through the end of 2018 have been slashed – being reduced to less than half what they were in 2015.  This decision came out of an arbitration process that resulted from the settlement of an antitrust lawsuit that the Radio Music License Committee (RMLC) brought against SESAC (see our article here for a summary of the settlement).  Yet, despite the significant reduction in the royalties for radio operators, both sides declared victory (see RMLC press release here and press reports on SESAC’s reaction here).  Can both be right?  While the decision of the arbitrators is not public so we can’t know for sure the reasoning behind the result, it might be that there is something to each of these claims.

For radio, the victory is clear.  For commercial radio broadcasters, the royalties were significantly decreased, retroactive back to the beginning of 2016 year for stations that had elected to have RMLC represent them in this lawsuit.  Some stations had been enticed by an offer made by SESAC at the beginning of 2016 offering stations a new SESAC license at rates 5% less than they were in 2015 (see our article here).  Those stations may not qualify for the much greater royalty reduction available to the majority of commercial stations that opted into RMLC representation and are covered by the arbitration result.  The new SESAC royalties will also cover the use of SESAC music on broadcaster’s streaming platforms and HD broadcasts, uses for which broadcasters had previously had to pay SESAC separately.  Of course, stations still need to pay public performance royalties for musical compositions to ASCAP, BMI and, in many cases, GMR and public performance royalties for sound recordings, when streaming recorded music, to SoundExchange.
Continue Reading SESAC Royalties for Commercial Radio Slashed By More Than Half – Both SESAC and RMLC Claim Victory in Arbitration

Commercial radio broadcasters have been seeing numerous communications over the last week about Global Music Rights (GMR) and its seemingly contentious music royalty negotiations with the Radio Music License Committee (RMLC). Many stations are confused about this controversy and what it is all about. The 5 questions below, and the links at the end of the questions, try to shed some light on the issues. Stations need to carefully consider their options, and seek advice where necessary, to determine what they will do by January 31 with respect to the interim license that GMR has offered to stations. The questions below hopefully provide some background on these issues.

 What is GMR and why isn’t the music they represent covered by the other organizations like BMI, ASCAP, and SESAC?

 GMR is a new performing rights organization. Like ASCAP, BMI and SESAC, they represent songwriters and collect royalties from music users for the public performance of these songwriter’s compositions. They will collect not just from radio, but from all music users – they have already reached out to business music services that provide the music played in retail stores, restaurants and other businesses and no doubt have or will license other companies that make music available to the public. Most songwriters represented by GMR used to be represented by ASCAP or BMI, but these songwriters have withdrawn from ASCAP and BMI and joined GMR, allegedly to attempt to increase the amounts that they are paid for the use of the songs that they have written. For radio, these withdrawals became effective on January 1 of this year, when the old license agreements between ASCAP and BMI and the commercial radio industry expired.

What does a station need to, in order to protect itself while negotiations are going on?

Because the penalties for playing a song without a license can be as much at $150,000 per song, stations either need to purge all GMR music from their stations or sign a license agreement with GMR. If you decide to purge their music from your stations, don’t forget about music that may appear in commercials or syndicated programming. Also remember that we are talking about the musical composition, not the recording of the song by any particular band or singer. Even the broadcast of a high school band playing a GMR song at half time of some football game, or the broadcast of a local middle school choral concert, could trigger the royalty obligation to GMR.
Continue Reading Background on the GMR/RMLC Dispute – 5 Questions on the Basics of the Controversy

Here we are at the start of a new year, and right away we have numerous regulatory deadlines for broadcasters. By the 10th of the month, all broadcast stations need to have placed in their public inspection files (online for TV and for those radio stations that have already converted to the online public file, and paper for the remaining radio stations), their Quarterly Issues Programs lists, documenting the issues of importance to their communities and the programs broadcast in the last quarter addressing those issues. TV stations have quarterly Children’s Television Reports due to be filed at the FCC by the 10th, addressing the programming that they broadcast to meet the educational and informational needs of children. Commercial TV stations should also add to their public file documentation to demonstrate their compliance with the commercial limits in programming addressed to children.

For TV stations, on the 1st of the year, new obligations became effective for online captioning. “Montages” of clips from TV programs, where all of those clips were captioned when broadcast, also need to be captioned when made available online. By July 1, clips of live and near-live programming must be captioned; however, they may be posted online initially without captions as long as captions are added to clips of live programming within 12 hours and to clips of near-live programming within eight hours after the conclusion of the TV showing of the full-length programming. For more on this requirement, see our article here.
Continue Reading January Regulatory Dates for Broadcasters – Quarterly Issues Programs Lists and Children’s Television Reports, Ownership and EEO Comments, Copyright Issues and More

On Saturday, RMLC announced that it has reached an “interim” agreement with the new performing rights organization Global Music Rights (GMR) for a license to perform musical compositions controlled by GMR.  This agreement (available on the RMLC website here) is an interim agreement for radio stations that elect to participate, and covers only the first 9 months of 2017.  To be covered by this license, a station must make an election by January 31, and pay the first month’s assessment to GMR by that date.  GMR has promised not to sue any stations in January while stations are deciding whether to opt into this agreement.  The amount to be paid by any individual station can be ascertained by communicating with GMR at an email address furnished by the RMLC in the notice distributed on Saturday.

This is an interim agreement as it removes the threat of a lawsuit for playing GMR music after January 1 that could potentially be faced by any radio station that does not have a license.  The rates paid by any station that opts in could be adjusted retroactively, up or down, based on the results of further negotiations between RMLC and GMR, or based on the results of the lawsuits currently being litigated between the two (see our article here on RMLC’s suit against GMR, and the article here about GMR’s follow-up lawsuit against RMLC, each accusing the other of violating the antitrust laws).  It would seem obvious that RMLC believes that the amounts being paid under this interim deal are higher than justified based on the percentage of music played by radio stations that is controlled by GMR.  If it was believed that the interim fee represented a fair price, then it would seem that RMLC would have entered into a permanent license at these rates – but instead the litigation continues.  What is a station to do?
Continue Reading GMR and RMLC Agree to Interim License for Commercial Radio Stations – Providing 9 Months to Reach Final Deal for Public Performance of Musical Compositions

ASCAP and the Radio Music License Committee (RMLC) announced yesterday that they have reached an agreement for the period 2017-2021, setting the performance royalties that commercial broadcasters will pay for the use of music written by composers who are represented by ASCAP. The press release issued yesterday discloses little about the details of the agreement.…

Just a few weeks ago, we wrote about the Radio Music License Committee (RMLC) filing a lawsuit against Global Music Rights (GMR) alleging that GMR was violating the antitrust laws by offering an all or nothing blanket license for rights to play the songs written by certain songwriters now represented by this new performing rights organization. RMLC was seeking to impose some oversight over the rates being charged for GMR royalties. This would be similar to the controls over the rates of ASCAP, BMI and SESAC, whose rates can only be imposed following an agreement with a copyright holder or, where there is no voluntary agreement, by a determination by a court (for ASCAP and BMI) or an arbitration panel (for SESAC) that the new rates are reasonable. Now, GMR has filed its own lawsuit against RMLC (though it claims that its suit is unrelated to the one that RMLC filed against it) alleging that it is RMLC that is violating the antitrust laws (and certain California statutes) by forming a “cartel” of buyers, i.e. commercial radio stations who are refusing to deal with GMR individually but instead are looking to RMLC for the negotiation of a license agreement that will cover the entire industry. What are the issues presented by this dueling litigation?

The RMLC suit is premised on the concept that any time multiple products from independent marketplace competitors (in this case the songs of multiple songwriters) are packaged together and sold at an all or nothing price, there is the potential for obtaining prices higher than would be obtained on the open market. For example, while a contemporary hits formatted radio station could potentially decide that the price of Adele songs are too high and pull those songs from its playlists, it is not able to do so if that song is bundled with songs written by Pharrell Williams, Bruno Mars, Beyoncé, Kanye West, Brittany Spears and Katie Perry (all of whom are listed on the GMR website as being part of its repertoire) so that the radio station either takes all the songs from all of those writers or none at all. While it might be able to get away with not playing one or two of these artists, if it has to pull them all, listeners will notice. If the station wants to keep playing in the format that it has selected, it has to pay the bundled rights fee asked by the representative performing rights organization.
Continue Reading GMR Sues RMLC – Claims Antitrust Violations for Negotiating Royalties on Behalf of the Radio Industry – What Are the Implications?

RMLC, the organization that represents most commercial radio stations in the US in negotiating music license agreements for the public performance of musical compositions, has filed an antitrust lawsuit against GMR (Global Music Rights). GMR is a new performing rights organization (PRO), founded by music industry heavyweight Irving Azoff.  As we wrote here and here, GMR has signed agreements to represent songs from the catalogs of many prominent songwriters, including Adele, Taylor Swift, some of the Beatles, Madonna, Jay Z and many other big names.  RMLC (the Radio Music License Committee) is asking in its lawsuit that, initially, GMR be enjoined from licensing its catalog of songs for more than a rate that represents the pro rata share of its catalog to those of the other PROs while its broader antitrust action is litigated to establish an appropriate mechanism for determining those rates in the future.

Currently, the two largest PROs, ASCAP and BMI, are subject to antitrust consent decrees that govern their operations – decrees that the Department of Justice recently refused to substantially modify at the request of these groups (see our articles here and here.).  SESAC recently entered into a settlement of with RMLC, following an antitrust action similar to the one filed Friday against GMR, imposing restraints on SESAC’s ability to unilaterally impose its rates on radio stations, requiring instead that such rates be set by arbitrators if they cannot be voluntarily negotiated (see our articles here and here).  The songs in the GMR catalog are covered by ASCAP, BMI and SESAC licenses through the term of the current licenses with those organizations, but those licenses for radio all expire this year (see our article here).  Thus, RMLC argues that, if there is no injunction, starting January 1, 2017, a radio station will either be forced to pay whatever rates GMR demands for songs that are being withdrawn from the catalogs of ASCAP, BMI and SESAC, or risk being sued for copyright infringement (and potential damages of up to $150,000 per infringement). …
Continue Reading RMLC Files Antitrust Lawsuit Against GMR And Seeks to Enjoin New Music License Fees on Radio Stations

SESAC was, until recently, the only one of the three major performing rights organizations (PROs) that was not subject to an antitrust consent decree – meaning that it could set the rates that it wanted without any oversight by any court or other judicial body. For practical purposes, that ended when the radio and television industries separately sued SESAC claiming antitrust violations. Both the radio and TV industries felt that the SESAC royalties were too high in relation to those charged by ASCAP and BMI given the far greater amount of music controlled by these two larger PROs. As we wrote here (television) and here (radio), both antitrust cases ended with settlements where SESAC agreed that its rates would be subject to review by an arbitration panel to assure their reasonableness, if voluntary negotiations between the groups representing the industries and SESAC were not successful in arriving at mutually agreeable rates. So far, it appears that the rate-setting process for radio and TV are going in different directions.

The TV Music License Committee and SESAC have announced that they have reached an agreement in principle as to rates for the TV industry. See the press release here. While the agreement has not been finalized or made public, if negotiations of the final documents are successful, the TV industry and SESAC appear to avoid having their rates set by the arbitration process. So far, that does not seem to be the case for the radio industry.
Continue Reading Update on the SESAC Royalty Arbitration Proceedings with the Radio and TV Industries

The “performing rights organizations” – ASCAP, BMI and SESAC – don’t get as much attention in these pages as do the royalties paid to SoundExchange for the use of “sound recordings.” The PROs collect for the public performance of the “musical work” or the musical composition – the words and music of a…

Yesterday, it was announced that the Radio Music License Committee (RMLC) settled its lawsuit with SESAC (see the press release here, and the full agreement here), where the RMLC had charged that SESAC’s practices in collecting its music royalties from the radio industry violated the antitrust laws (we wrote about the filing of the lawsuit here). While there was no admission of guilt by SESAC, it did agree that, between now and 2037, it will negotiate royalties with RMLC on an industry wide basis (up to now, SESAC could negotiate on a station-by-station basis). If RMLC and SESAC can’t agree to a royalty, the royalty rate will be set by an arbitrator – and past SESAC royalties would not have any precedential value in such proceedings (broadcasters have contended that past SESAC rates are far more, in comparison to those charged by ASCAP and BMI, then would be warranted based on the percentage of music from SESAC writers that is played on most radio stations). In subjecting SESAC to industry-wide negotiations and potential arbitration, the settlement is very similar to the deal reached in antitrust litigation between SESAC and the TV Music License Committee (about which we wrote here).

The settlement also tracks the structure of RMLC agreements with ASCAP and BMI (see our articles here and here) in that future SESAC licenses will cover broadcasters not only for their over-the-air programming, but also for their Internet streams and their HD channels (which were charged separately by SESAC for many stations). However, the agreement provides that the unitary license should not diminish the total royalties that would have been paid by the industry to SESAC if these rates were negotiated separately.   In other words, the effect of the unitary license is simply administrative convenience – everything is covered by a single license, so each station does not need multiple licenses from SESAC for its normal broadcast activities. However, unlike the ASCAP and BMI agreements, this agreement puts limits on this unified coverage for a broadcaster’s business that is outside the retransmission of the broadcaster’s over-the-air signals, excluding on-demand subscription services (presumably ruling out Rdio, in which Cumulus has an interest, from being covered by the radio license), and also excluding music-intensive custom radio, specifically ruling out Pandora and iHeartRadio from relying on this license for their online services. The agreement also says that other music users that are not primarily radio operators cannot get coverage for these other non-broadcast businesses simply by buying a radio station. What else does the agreement provide?
Continue Reading Radio Music License Committee Settles Antitrust Suit Against SESAC – What Does it Mean for the Radio Industry?