The Copyright Royalty Board has extended the deadline for comments on proposals to change the recordkeeping obligations of webcasters and others who use music under the statutory license granted by Section 114 of the Copyright Act. Some of the proposed changes include requiring that services provide ISRC codes for all songs when filing their Reports
On Friday, the Copyright Royalty Board published in the Federal Register a proposal for changes in its recordkeeping rules – suggesting more detailed requirements for larger webcasters who are required to report the songs that they play on a “census” basis – that would be most webcasters who are required to report the songs that they play, how often they were played, and how many people listened when they were played each time. Conversely, for the smallest of webcasters, those who pay a “proxy fee” so that they do not have to report the details of how many listeners were listening to each song that was played, the questions asked by the CRB are geared to potentially expanding the universe of those who do not need to report. Comments are due on June 2, with replies due on June 16. Given the potential economic impact that these proposals could have on businesses of all sizes, anyone steaming their music on the Internet and reporting to SoundExchange should carefully consider the details of the Notice of Proposed Rulemaking and whether to submit comments in this proceeding.
The proposals to require more detailed recordkeeping originated from SoundExchange, which filed a Petition for Rulemaking asking that the CRB adopt new rules on a number of issues. The Board last comprehensively visited this topic in 2009 (see our summary here). The Board’s Notice of Proposed Recordkeeping poses a number of questions that were raised by SoundExchange, and asks for public comment. What are these proposals?…
Continue Reading Copyright Royalty Board Starts Rulemaking to Change Recordkeeping Requirements for Commercial and Noncommercial Webcasters
Noncommercial webcasters were provided with two royalty options under settlements reached with SoundExchange pursuant to the Webcaster Settlement Act of 2009 ("WSA"). One settlement was with Noncommercial Educational Webcasters. The other, when announced, was characterized by SoundExchange as being a settlement with noncommercial religious broadcasters, though it applies to any noncommercial webcaster who elects to be subject to its terms. As set forth below, except for certain mid-sized noncommercial webcasters who have more forgiving recordkeeping options under the Educational deal, it would seem that the settlement with the religious broadcasters provides far more advantageous terms, and it also reaches back to cover the period from 2006 through 2010. The Educational webcasters agreement covers only the rates for the periods from 2011-2015. These settlements provide another example of the issue raised before the Senate Judiciary Committee of the arbitrary nature of the precedential nature that will be accorded to WSA settlements in future webcasting proceedings. The noncommercial agreement with significantly higer prices has been accorded precedential weight in future CRB proceedings, while the one with lower rates is, by its terms, not precedential in future proceedings.
It is easiest to start with a review of the ‘Religious" broadcaters settlement (which, as we said above, is open to any noncommecial webcaster). The agreement provides for a $500 per channel fee for each channel or stream offered by the noncommercial webcaster. For that flat fee of $500 per channel, the webcaster can stream up to 159,140 monthly aggregate tuning hours of programming on each stream. An Aggregate Tuning Hour ("ATH") is one hour of programming streamed to one person. Thus, if you have 2 people who each listen for an hour, you would have two aggegate tuning hours. A station with 2 listeners who each listen for half an hour would have one ATH of listening. 4 listeners for 15 minutes each would also add up to one ATH. The 159,140 monthly ATH number represents listening of approximately 221 average simultaneous listeners 24 hours a day, 7 days a week. If a webcaster exceeds this listening level, it must pay for excess listening on a per performance (per song per listener) basis, at the rates set out below.
In January, the Copyright Royalty Board asked for comments as to whether it should require "census reporting" of all sound recordings that are used by a digital service subject to the statutory royalty. This would replace the current requirement that services need only report on the sound recordings used for two weeks every calender quarter. Most of the comments that were filed dealt with the difficulties of certain classes of webcasters – particularly small webcasters and certain broadcasters – in keeping full census reports of every song that is played by a service, and how many people heard each song. In a Notice of Inquiry published in the Federal Register today, the CRB asked for further information about the cost and difficulties of such reporting. Comments on the Notice are due on May 26, 2009, and replies on June 8.
The real issues, as identified by the CRB, were raised by smaller entities that argued that they do not have the ability to track performances. Especially problematic are stations that have on-air announcers who pick the music that they want to play in real time, and don’t run their programming through any sort of automation system or music scheduling software. Live DJs playing music that they want is a hallmark of college radio, but one that creates problems for tracking performances. How can a DJ’s on-the-fly selection of music be converted to the nice, neat computer spreadsheets required by SoundExchange for the Reports of Use of music played?