NAB Urges Copyright Royalty Board To Lower Rates For 'Non-Interactive' Streaming

Copyright Royalty Board

The NATIONAL ASSOCIATION OF BROADCASTERS is asking the three-judge COPYRIGHT ROYALTY BOARD to consider lowering the rates being paid by 'non-interactive" services that stream sound recordings (PANDORA, iHEART, SIRIUSXM and local stations that "simulcast' their over-the-air service on the Internet) this WEDNESDAY (DECEMBER 16th) which will be paid in years 2016-'20. This does not include streaming services such as PANDORA and SPOTIFY, though rates will be established separately for them as well.

The NAB explains that "streaming rates have risen at an unsustainable pace... While such rates have padded the bottom lines of record labels, these rates have proven cost-prohibitive for many radio broadcasters seeking to enter the streaming business. Thousands of local radio stations have simply refused to stream music, thus denying listeners additional choices on new distribution platforms."

The NAB is calling on the CRB -- which is charged by CONGRESS with establishing sound recording royalties for "non-interactive" streaming every five years – to adjust those rates for the next five years to a level "that will enable a viable streaming business model for local radio stations," reasoning a lower rate will prompt "more broadcasters [to] invest in and expand streaming services to the benefit of artists, songwriters, and consumers."

In the most recent CRB proceeding, both webcasters and simulcasters – including NAB, iHEARTMEDIA, PANDORA, SIRIUSXM, college broadcasters, and religious broadcasters – offered testimony and evidence suggesting that previous rates resulted from "flawed evidence and analysis."

For the first time, interested parties were permitted to present evidence of marketplace deals for "non-interactive" streaming services instead of using benchmark rates for on-demand music services like PANDORA or SPOTIFY. The NAB insists this new evidence presents to the CRB a "more reliable" indicator of what constitutes a fair market rate for streamed programming.

The NAB insists "listeners and creators benefit when a station’s reach is enhanced through an Internet stream," and that streaming among broadcasters "has been stifled for the past decade by unsustainably high royalty rates."

According to the NAB, for the past five years, most local radio stations have paid streaming rates nearly double those of “pureplay” streaming services. For example, most NAB member radio stations that stream music pay 25 cents for every 100 songs streamed, compared to the rate paid by PANDORA, which is 14 cents for every 100 songs streamed.

The NAB calls on the CRB "to correct this inconsistency in rate structure to reflect the value that local radio station simulcasting provides to our listeners."

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