NAB Asks Copyright Board To Reset Broadcasters' Streaming Royalty Rates

Lower, Please

The NAB has filed comments with the COPYRIGHT ROYALTY BOARD asking the CRB to start over and set rates for broadcasters' streaming audio license fees that reflect the kind of rates that would result from willing buyers and sellers negotiating in a competitive market.  Previously, the NAB contended, rates were based on "flawed evidence" using analysis of non-competitive markets, based on a 2007 CRB decision to use licenses granted by the major record labels to customizable streaming services as the basis for the rates for broadcasters' streaming.  The NAB pointed out that of the seven streaming services used in the 2007 analysis, all but one have failed, proving, the NAB contends, that the rates were set too high.

In the filing, the NAB said that most broadcasters "cannot make money on streaming, despite having made significant efforts to do so.  Some have reached a business decision to limit their streaming or not to stream at all, despite the potential to expand their listening audience. For all of these reasons, a significant rate reset is necessary so that streaming can be a viable business that will allow broadcasters to provide streaming services to the audiences that rely on them and benefit from them."

In addition, the NAB suggested that broadcasters' service to listeners, artists, and labels should be considered in the equation.  "(L)abels and artists devote immense resources to securing spins on radio," the NAB pointed out. "In addition, labels seek to harness the influence and relationships that radio stations and on-air personalities have built with their listeners and local communities in order to promote sound recordings."

And the NAB asked the CRB to take radio stations' size and market into consideration, noting the narrower profit margins in smaller markets. "(A)dvertisers do not value and are not willing to pay for audiences that have fewer than 100 to 200 average concurrent listeners," the filing asserted. "These smaller broadcasters, thus, face economic conditions comparable to those that led the Judges to adopt a flat $500 fee for non-commercial radio stations in the remand decision of the third Webcasting proceeding."

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