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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 radio.  Internet 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

One of the fundamental questions that surrounds the proposed broadcast performance royalty for the use of sound recordings by over-the-air (or the "performance tax" as it has been labeled by the NAB) is how much it could it cost a broadcaster?  Right now, that question is difficult to determine, as the pending bills do not themselves provide any details as to what the fees would be, except for noncommercial entities and for small broadcasters for whom fixed yearly fees are proposed.  For a broadcaster with a station having over $1.25 million in yearly revenues, the current Congressional bills leave the amount of the royalty to be determined by the Copyright Royalty Board.  In the current Senate draft of the bill, the amount to be paid would be based on the "willing buyer willing seller" standard that has been so controversial for Internet Radio companies. But the hearing to be held by the Senate Judiciary Committee tomorrow will address, among other issues, the question of "platform parity," i.e whether all companies subject to the sound recording performance royalty should pay a comparable rate, so we may see that proposal change as it did in the House version, to some form of the 801(b) standard (about which we wrote here and here).

We will write about the differing rates paid by differing music services in the next few days, especially as it becomes clear as to what rates for Internet radio royalties were agreed to under the most recent settlements with webcasters pursuant to the Webcaster Settlement Act.   But even without a detailed analysis of all of the rates that have been agreed to, certain trends can be seen as to what SoundExchange, on behalf of the artists and copyright holders, believes to be a fair royalty for the use of their music.  And that number is likely to be a "Substantial" one, as suggested by a recent Congressional Budget Office review of the cost to broadcasters of the proposed performance royalty.…

Continue Reading Broadcast Performance Royalty – What Would It Cost? The Congressional Budget Office Says A “Substantial” Amount

Here we are, almost a full month into the new year, and a number of important dates for broadcasters are already upon us.  As we wrote here, for instance, the payment of a minimum fee to SoundExchange by radio stations streaming their signals on the Internet is due today.  Lowest unit rates are in…