By: David Oxenford,
Wilkinson Barker Knauer LLP
The Copyright Royalty Board (CRB) on Friday (6/11) released the rates and terms for webcasting royalties for 2021-2025, and the rates are going up. While the full decision explaining the reasoning for the rate increases will not be released to the public until the parties to the case have the opportunity to seek redaction of private business information, the rates and terms themselves were released and can be found here. These new rules apply to all noninteractive webcasters including broadcasters who are simulcasting their over-the-air signals on the Internet. As detailed below, both the per-performance and annual minimum fees will be increasing for both commercial and nonprofit webcasters.
The per-performance royalty increases to $.0021 for non-subscription streams, up from the current $.0018. For subscription streams, the fee increases to $.0026 per performance from $.0023. A performance is one song played to one listener. So, if a streaming service plays one song that is heard by 100 listeners, that is 100 performances.
The minimum yearly per channel fee that each webcaster must pay at the beginning of each year is going up to $1000 for each channel that is streamed. For each entity that is relying on this compulsory license, the aggregate minimum fee is $100,000. That means that, each January, a company relying on this license will have to pay $1000 per channel (commercial or noncommercial) up to $100,000. These yearly up-front payments will be credited against actual usage fees. These minimums are an increase from the previous $500 per channel minimum and $50,000 up-front maximum payment that were in effect prior to January 1 of this year.
Noncommercial webcasters will be subject to the same minimum fees. However, a webcaster who is a nonprofit entity is permitted to stream on any channel up to 159,140 aggregate tuning hours per month for the yearly $1000 minimum fee paid for that channel. That permits a nonprofit webcaster to average approximately 200 simultaneous listeners 24 hours every day without having to pay more than the minimum fee. Many small nonprofit webcasters and simulcasters will not exceed that threshold. If they do exceed that monthly listening limit on any stream, royalties will be paid on all overages at the commercial per performance rates. Note that entities affiliated with the Corporation for Public Broadcasting are not subject to these rates as CPB has negotiated with SoundExchange, the organization that collects royalties, a blanket agreement that covers CPB member stations.
From these rates and terms, it appears that the CRB rejected broadcasters’ request that a substantially lower royalty be assessed against broadcast simulcasts, given factors including the total inability of listeners to influence the songs that they are hearing. We wrote about those arguments and the positions of other webcasters who argued for lower royalties, here.
Payments under these new rates may be retroactive to January 1 of this year. As we wrote here and here, this decision was supposed to be released in December, but was delayed by the pandemic. After the release of the full decision, the parties have a short time to ask for review and correction of a limited set of issues. The Copyright Office can also review the decision for legal errors. Otherwise, the decision is appealable to the US Court of Appeals.
We’ll write more about the details of the decision when it is released. Be sure to follow developments including the process by which the new royalties will
David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline. Access information here. (Members only access).
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