Webcasting Royalty Wars Commence: SoundExchange Wants More, Radio A Lot Less
November 10, 2014 at 12:09 PM (PT)
The U.S. COPYRIGHT ROYALTY BOARD (CRB) has received briefs from both sides regarding the royalty rates to be paid by webcasters to SOUNDEXCHANGE for the public performance of sound recordings for 2016-2020 -- and predictably, they varied greatly. LEXICOLOGY.COM reports that SOUNDEXCHANGE, representing the content providers, wants the royalty raised, while the NAB, iHEARTMEDIA and PANDORA argued for lower royalty rates -- in HEARTMEDIA's case, an 80% cut in the royalty rate.
SOUNDEXCHANGE suggested a royalty bump from $.0023 per performance to $.0025 in 2016 and $.0029 in 2020. They further recommended that the CRB adopt a new “greater of” formulation, where all commercial Internet radio services should pay tup to 55% of revenue related to their streaming.
WILKINSON BARKER KNAUER LLP Attorney DAVID OXENFORD reports that PANDORA adopted "SOUNDEXCHANGE's 'greater of' formulation with the per performance royalties for ad-supported streams, but starting at $.0010 (slightly less than what they are paying now under the 'Pureplay' WSA agreement), and modestly increasing over the five-year term." For its part, iHEARTMEDIA and the NAB proposed reducing the existing royalty rate webcasters pay to artists and labels by 80% to $0.0005 for the entire 2016-2020 royalty period, for all applicable webcasting. The NAB also suggested a flat fee royalty of $500 a year for broadcasters who average around 100 listeners.
"This range of royalty rates demonstrates a fundamental difference of opinion as to the state of the industry and just what the 'willing buyer, willing seller' rate for royalties, the rate that needs to be set by the CRB, should be," OXENFORD wrote. "The Board and the parties will have to sort out the hundreds of pages of testimony before a final decision on the royalties for 2016-2020 is made. Now that these direct cases are on file, the parties will engage in discovery (depositions, document requests and interrogatories, similar to those in any civil litigation) through DECEMBER, then they will have time to refine their cases based on the discovery and to submit rebuttal testimony to refute the contentions of the other side. A trial, with witnesses and cross-examination, will take place in WASHINGTON in APRIL and MAY. Final briefing and arguments about the case will follow in JUNE and JULY, with a decision to be reached by the Board by the end of 2015.