The US Court of Appeals for the DC Circuit issued a decision last week rejecting all of the appeals of the decision by the Copyright Royalty Board (“CRB”) setting the rates that noninteractive webcasters pay to SoundExchange for the digital public performance of sound recordings in the period 2021-2025 (see our article here on the 2021 CRB decision). As detailed below, the Court rejected appeals from three parties, two that argued that the rates were set too high for specific classes of webcasters, and one from SoundExchange itself which argued that the rates should have been even higher.
As a reminder, the CRB rates apply to all companies who provide a non-interactive, internet-delivered steam of programming which includes recorded music or other audio content, including broadcasters who simulcast their over-the-air programming on the internet. Congress established the process of setting rates through hearings by the CRB so that noninteractive webcasters would have access to all recorded and publicly released audio recordings without having to individually negotiate with each copyright holder (see our article here about the CRB’s responsibilities). Services pay these “statutory royalties” to SoundExchange, observe certain requirements that limit how often particular recordings are played so as to not make the services a substitute for buying recordings or listening to them through on-demand services (which pay higher royalties negotiated directly with the copyright holder), and report to SoundExchange what they play. SoundExchange collects the royalties and uses the reports of what the services played to distribute the royalties they collect. One-half of the royalties collected go to the performers on the sound recording, and one-half to the copyright holders of the recording, usually the record labels that own the copyrights for sound recordings.