sound recording performance royalty

Last week, Congressmen Ted Deutch (D-FL) and Darrell Issa (R-CA) introduced the American Music Fairness Act ( see their Press Release for more details) which would impose a new music royalty on over-the-air radio stations.  The royalty would be payable to SoundExchange for the public performance of sound recordings.  This means that the money collected would be paid to performing artists and record labels for the use of their recording of a song.  This new royalty would be in addition to the royalties paid by radio stations to composers and publishing companies through ASCAP, BMI, SESAC and GMR, which are paid for the performance of the musical composition – the words and music to a song. The new legislation is another in a string of similar bills introduced in Congress over the last decade.  See, for instance, our articles here, here, here and here on previous attempts to impose such a royalty.

Each time this idea is introduced, it has a slightly different angle.  In an attempt to rebut arguments that this royalty would impose an unreasonable financial burden on small broadcasters, the new bill proposes relatively low flat fees on small commercial and noncommercial radio stations, while the rates applicable to all other broadcasters would be determined by the Copyright Royalty Board – the same judges who recently released their decision to increase the royalties payable to SoundExchange by webcasters, including broadcasters for their internet simulcasts.  Under the bill, the CRB would review rates every 5 years, just as they do for webcasting royalty rates.
Continue Reading New Legislation to Impose Sound Recording Performance Royalty on Over-the-Air Radio – What Does It Provide and What Would the Royalty Cost?

The broadcast trade press is full today with the news that NAB CEO Gordon Smith will be stepping back from that position at the end of the year, to be replaced by current COO (and former head of Government Relations) Curtis LeGeyt.  As many will remember, Smith took over the organization over a decade ago during a turbulent time for the industry.  At the time, TV stations faced increasing calls for other uses of the broadcast spectrum, and radio stations faced a possible performance royalty on their over-the-air broadcasts of sound recordings.  Since then, through all sorts of issues, there has been a general consensus in the industry that its leadership was in capable hands and meeting the issues as they arose.

But many issues remain for broadcasters – some of them ones that have never gone away completely.  The sound recording performance royalty for over-the-air broadcasting remains an issue, as do other music licensing issues calling for changes to the way that songwriters and composers are compensated, generally calling for higher payments or different compensation systems (see our articles here on the GMR controversy and here on the review of music industry antitrust consent decrees).  TV stations, while having gone through the incentive auction giving up significant parts of the TV broadcast spectrum, still face demands by wireless operators and others hungry for more spectrum to provide the many in-demand services necessary to meet the need for faster mobile services (see our articles here on C-Band redeployment and here on requests for a set aside of TV spectrum for unlicensed wireless users).  But competition from digital services may well be the biggest current issue facing broadcasters.
Continue Reading With a Change at the Top at the NAB as CEO Gordon Smith Plans His Departure – What are the Regulatory Issues That are Facing Broadcasters?

After a long winter, spring has finally arrived and has brought with it more daylight and warmer temperatures—two occurrences that do not necessarily pair well with keeping up with broadcast regulatory dates and deadlines.  Here are some of the important dates coming in April.  Be sure to consult with your FCC counsel on all other important dates applicable to your own operations.

On or before April 1, radio stations in Texas (including LPFM stations) and television stations in Indiana, Kentucky, and Tennessee must file their license renewal applications through the FCC’s Licensing and Management System (LMS).  Those stations must also file with the FCC a Broadcast EEO Program Report (Form 2100, Schedule 396).

Both radio and TV stations in the states listed above with April 1 renewal filing deadlines, as well as radio and TV stations in Delaware and Pennsylvania, if they are part of a station employment unit with 5 or more full-time employees (an employment unit is a station or a group of commonly controlled stations in the same market that share at least one employee), by April 1 must upload to their public file and post a link on their station website to their Annual EEO Public Inspection Report covering their hiring and employment outreach activities for the twelve months from April 1, 2020 to March 31, 2021.
Continue Reading April Regulatory Dates for Broadcasters: License Renewal, Issues/Programs Lists, EEO, Webcasting Royalties and More

Here are some of the regulatory developments of the last week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.  Also, we include a quick look at some important dates in the future.

  • The Enforcement Bureau advised broadcasters (and other

The NAB recently announced that a majority of Congress has signed on to the Local Radio Freedom Act, the nonbinding resolution where Congressional representatives declare their opposition to the adoption of a broadcast performance royalty.  With that announcement, it is worth taking another look at what a broadcast performance royalty is and what might happen next.  We have been covering the arguments about a broadcast performance royalty for over 13 years, but it still bears consideration as I find that there are still broadcasters who do not fully understand the issues.

As we’ve written before, the royalties that broadcasters pay to ASCAP, BMI, SESAC and even GMR are paid for the public performance of musical compositions (or “musical works,” the words and music in a song).  These royalties are paid to the composers of music (and the copyright holders in the musical compositions, usually a publishing company). The broadcast performance royalty proposes that broadcasters also pay royalties for the public performance of sound recordings.  A sound recording is the actual recording of a musical composition by a singer or band.  Sound recording royalties are paid to the performers (and the copyright holders in the performances, usually the record labels). Broadcasters do pay these royalties now to SoundExchange when they stream their programming on the Internet. But in the US, other than digital audio services (like webcasters and music services like Pandora, Sirius XM, Spotify or Apple Music), over-the-air broadcasters and other businesses (like bars, restaurants, and retail establishments) who play sound recordings are not subject to a performance royalty for the performance of those sound recordings, though such royalties are paid in many other countries in the world.
Continue Reading NAB Announces that a Majority in Congress Have Signed on to the Local Radio Freedom Act – A Look at the Broadcast Performance Royalty Debate

Here are some of the regulatory and legal actions of the last week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.

  • FCC fines against two radio stations serve as a reminder that station managers need to pay close attention

The Copyright Royalty Board issued a notice yesterday, here, that summarized its decision on the sound recording performance royalties for 2018-2022 to be paid by Satellite Radio and “Pre-existing Subscription Services” (“PSS”), essentially Music Choice for its music service usually packaged with cable television subscriptions. The terms associated with the new rates, embodied in the new rules adopted by the CRB, are available here. The CRB announcement states that the Sirius XM rates will be 15.5% of revenue, which represents an increase from the 11% they are paying currently. The terms for these rates set out a means by which Sirius XM can reduce the revenue subject to the royalty by directly licensing music or using pre-1972 sound recordings, the percentage of such songs being determined by determining their percentage of play on Sirius XM Internet radio channels that correspond directly to their satellite service.

By contrast, the rates for Music Choice (and any other similar PSS having been established prior to 1998 when the Digital Millennium Copyright Act was adopted that may still be in existence) decreased from 8.5% of revenue to 7.5%, the rate that had been in effect in 2012. Our article here describes the decision in 2012 setting the current royalty, and the article here summarizes the Court of Appeals decision upholding the 2012 CRB determination.
Continue Reading Copyright Royalty Board News – Sirius XM Rates Going Up, Some Cable Radio Rates Going Down, and Webcasting Rate Appeal to Be Argued in February

The Copyright Royalty Board yesterday announced in the Federal Register, here, that the sound recording royalty rates paid to SoundExchange will be increasing next year.  In December 2015, when the CRB set the current royalty rates that apply from January 1, 2016 through December 31, 2020 (see our articles here and here),

The alphabet soup of organizations that collect royalties for playing music has never been easy to keep straight, and today royalty issues sometimes seem even more daunting with new players like GMR (see our articles here, here and here) and arguments over issues like fractional licensing that only a music lawyer could love (see our articles here and here). But there are certain basics that broadcasters and other companies that are streaming need to know. Based on several questions that I received in the last few weeks, I’ve been surprised that one of the issues that still seems to be a source of confusion is the need to pay SoundExchange when streaming music online or through mobile apps. For the last 20 years, since the adoption of the Digital Millennium Copyright Act, anyone digitally transmitting noninteractive music programming must pay SoundExchange in addition to ASCAP, BMI and SESAC (and more recently GMR) for the rights to play recorded music – unless the service doing the digital transmission has directly secured the rights to play those songs from the copyright holders of the recordings – usually the record labels.  Why is there this additional payment on top of ASCAP, BMI and SESAC?

SoundExchange represents the recording artists and record labels for the royalties for the performance of the recording of a song (a “sound recording” or a “master recording”).  ASCAP, BMI, SESAC and GMR by contrast represent the songwriters who wrote the song (not the performers) and their publishing companies.  When you play music on your over-the-air radio signal, you only pay for the public performance rights to the underlying musical composition or “musical work” as it is often referred to in the music licensing world – the words and music of the song.  This money goes to the songwriters and their publishing companies (the publishing companies usually holding the copyright to the musical composition). But, in the digital world, for the last 20 years, anyone who streams music, in addition to paying the songwriters, must pay the performers who recorded the songs and the copyright holders in the sound recordings (usually the labels).  That is the royalty that SoundExchange collects.
Continue Reading Are You Streaming Your Radio Station? Reminder that Broadcasters Need to Pay Royalties to SoundExchange as well as ASCAP, BMI and SESAC

A year ago, when the Copyright Royalty Board adopted the rates for webcasters (including broadcasters who simulcast their programming by online streaming) to pay for the sound recording performance royalty (see our summary here and here), one difference from previous decisions is that there was a single per-song, per-listener royalty adopted. In the past