soundexchange royalties

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

  • The Supreme Court this week announced its decision in Federal Communications Commission v. Prometheus Radio Project, the broadcast ownership

The Copyright Office this week granted a request from the Copyright Royalty Board for more time to decide on the royalties to be paid to SoundExchange for the public performance of sound recordings by webcasters, including broadcasters who simulcast their programming on the Internet.  As we wrote in July, the CRB decision on

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 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

A decision was expected in December on the royalties to be paid by broadcasters and other digital media companies who stream their non-interactive audio programming on the Internet.  As we wrote at the beginning of the pandemic, the Copyright Royalty Board, which hears the arguments about the royalties to be paid to SoundExchange in a trial-type administrative hearing, had to postpone the hearing that was initially slated to begin in March.  That hearing will now begin later this month.  Because of the delays in the hearing caused by the pandemic, Congress authorized the Copyright Office to extend various statutory deadlines.  This week, the Copyright Office announced that the December deadline for a decision on webcasting royalties has been pushed until April 15, 2021.

This does not mean that the royalties themselves will not go into effect on January 1.  The current CRB proceeding is to determine the rates that will be in effect for 2021 through 2025.  The proceeding began early in 2019 (see our posts here and here).  The January 1 effective date for the new royalties remains in place, so any decision released later in 2021 will be retroactive.  In January, webcasters and other internet radio operators will pay the royalties currently in place, and there will be some mechanism for a true up of the amounts due once the decision becomes effective.  That is not unusual in the music royalty world.  Just a few months ago, the Radio Music License Committee reached an agreement with BMI on royalties that was retroactive several years.  The Copyright Royalty Board decisions themselves, even if released to the parties in December, are often not final until the next year as the public version of any CRB decision usually takes time to release, and the parties have time after a decision is released to seek edits to the decision.  The Copyright Office itself also reviews the CRB decision for legal errors.  Even after that, the decision can be appealed to the Courts, so the ultimate resolution may be unknown for years – yet parties conduct their business while waiting to see if any adjustments to fees already paid may be due at some later time.
Continue Reading Copyright Office Extends Until April Date by Which Decision on SoundExchange Royalties for 2021-2025 Must be Released

Last week, we noted that the Copyright Royalty Board had a notice on its website saying that, because of the government shutdown, it could not publish its notice soliciting petitions to participate in WEB V, the case to set webcasting royalties paid to SoundExchange by noninteractive webcasters (including broadcasters who simulcast their programming on the

Update – January 24, 2019 – the notice seeking petitions to participate has been published in the Federal Register, setting a filing deadline of February 4, 2019.  See our article here for more details.

In our summary of January regulatory issues for broadcasters, we suggested that the Copyright Royalty Board this month might start

Last week, the Copyright Royalty Board announced its calculations for whether there would be a cost of living increase in the 2019 rates that Internet radio stations pay to SoundExchange for the public performance of sound recordings. In its initial release on the subject, the CRB’s announcement indicated that commercial webcasters would continue to pay at the rate of $.0018 per performance (set after a cost of living increase last year – see our post here). But that same notice indicated that the per performance rate would be $.0019 for noncommercial webcasters with substantial listening (i.e., those that stream more than the 159,140 aggregate monthly tuning hours that noncommercial webcasters receive for a $500 yearly payment), causing some concern among noncommercial webcasters as their per performance rates were supposed to be based on what commercial webcasters paid. That notice was revealed to be a typo according to a Federal Register correction published today – keeping the noncommercial rates at $.0018 once the noncommercial webcaster exceeds the initial complement of streaming hours it gets for the $500 yearly minimum payment (see our initial article on that decision here, and one that provided more details here).

While the rates stay the same for 2019, and will stay substantially the same for 2020 (subject only to a cost of living increase, if any), 2019 will begin the CRB proceeding for the setting of webcaster’s SoundExchange royalty rates for 2021-2026. The CRB sets rates in 5 year increments. But the proceedings to set those rates normally take two years to complete, so the proceeding to set the rates to be effective in 2021 will begin with interested parties filing petitions to participate in the proceeding following a CRB invitation to file, likely to be released at the beginning of 2019. Once parties have filed to participate, the CRB will announce a mandatory 90 day period in which the parties are to try to settle the case. If there is no settlement, the litigation will run through the remainder of 2019 and 2020, with a decision to be issued by the end of 2020.
Continue Reading No Cost of Living Change in Webcasting Royalties for 2019 – Rate Proceeding for 2021-2026 about to Begin

The US Court of Appeals today released a decision upholding the Copyright Royalty Board’s 2015 decision setting the SoundExchange royalty rates for 2016-2020. We wrote about that decision here, and provided more details here. In any appeal of an agency decision, the Court routinely affords the agency deference in reaching its decision. The Court will not overturn that decision unless it has no basis in the record developed on the matter before the agency, or unless the agency decision was arbitrary and capricious – in plain English, the agency did not reach a logical conclusion based on the facts before it. That means that the Courts will not overturn a decision just because the agency might have logically reached another decision – but instead it will only intervene where the agency came to a conclusion that could not be logically supported. In this case, no reason to overturn the CRB decision was found.

SoundExchange on appeal had attacked the CRB decision on several grounds – arguing that several defects led to an inappropriate decision as to the rates that would have been determined by a “willing buyer and willing seller” in a marketplace, the standard to be used by the CRB in setting rates. SoundExchange attacked the benchmarks that were relied on by the CRB to set the rates (the direct licensing deals on royalties arrived at between webcasters Pandora and iHeart Media and various record companies) arguing that these rates were too low as they were negotiated in the “shadow of the statutory license.” They argued that the only direct deals that could have been done were ones that were lower than the rates established by the CRB during the prior rate term, as no music service would agree to higher rates. Arguments were also raised that these rates relied on “steering” – the prospect that labels who agreed to the rates had songs played more frequently than those that did not agree to lower rates. SoundExchange argued that not all labels could take advantage of steering (as a label can only get the benefit of steering when a service is playing less of the music of labels that did not pay for steering). The appeals also challenged the determination that a qualified auditor to check royalty compliance had to be a CPA licensed in the state where the audit was conducted.
Continue Reading Court of Appeals Upholds Copyright Royalty Board’s 2015 Webcasting Royalty Rate Decision

In the last year, the popularity of Alexa, Google Home and similar “smart speaker” devices has led to discussions at almost every broadcast conference of how radio broadcasters should embrace the technology as the new way for listeners to access radio programming in their homes. Broadcasters are urged to adopt strategies to take advantage of the technology to keep listeners listening to their radio stations through these new devices. Obviously, broadcasters want their content where the listeners are, and they have to take advantage of new platforms like the smart speaker. But in doing so, they also need to be cognizant that the technology imposes new costs on their operations – in particular increased fees payable to SoundExchange.

Never mentioned at these broadcast conferences that urge broadcasters to take advantage of these smart speakers is the fact that these speakers, when asked to play a radio station, end up playing that station’s stream, not its over-the-air signal. For the most part, these devices are not equipped with FM chips or any other technology to receive over-the-air signals. So, when you ask Alexa or Google to play your station, you are calling up a digital stream, and each digital stream gives rise to the same royalties to SoundExchange that a station pays for its webcast stream on its app or through a platform like TuneIn or the iHeartRadio. For 2018, those royalties are $.0018 per song per listener (see our article here). In other words, for each song you play, you pay SoundExchange about one-fifth of a cent for each listener who hears it. These royalties are in addition to the royalties paid to ASCAP, BMI, SESAC and, for most commercial stations, GMR.
Continue Reading Hey, Alexa, How Much Did You Raise My SoundExchange Royalties?