The Copyright Royalty Board (CRB) took a middle path in setting new webcaster royalty rates for 2016, and if it’s difficult to identify winners and losers, the official comments emanating from three major litigants tell one story. That is: major webcasters OK with it; music industry not.
This is a balanced rate that we can work and grow from,” said Brian McAndrews, CEO of Pandora.
iHeartMedia competes with Pandora in its iHeartRadio app, which has a highly evolved personalized station function alongside its radio-station webcasts. “We believe that the rates the CRB announced today will make it possible to spend more and drive more to build volume – all of which will benefit the artists, the record labels, consumers and the entire music industry,” iHeartMedia stated in an email to RAIN News.
If both statements imply an optimistic belt-tightening and forward-looking stance, SoundExchange issued a critical and ominous tone: “We believe the rates set by the CRB do not reflect a market price for music and will erode the value of music in our economy. We will review the decision closely and consider all of our options.”
That sounded like a threat to one investor in Pandora’s post-CRB conference call, who asked Brian McAndrews whether SoundExchange might take legal action. The Pandora CEO acknowledged that there is an appeal process available, and that SoundExchange could also ask the Copyright Royalty Board to re-open the Webcaster IV proceeding. “Those avenues have not been successful historically,” McAndrews noted.
See Pandora’s published press release about the CRB rates here.
Following are the complete comments from iHeartMedia and SoundExchange:
“We appreciate the attention the judges took to understand the issues and the dynamics at work. We understand we have a responsibility to use this rate to increase volume, thereby increasing revenues paid to artists and music companies, creating a growth market and supporting services that consumers want and can afford.
“We believe that the rates the CRB announced today will make it possible to spend more and drive more to build volume – all of which will benefit the artists, the record labels, consumers and the entire music industry.
“We look forward to working very closely with artists and our partners at the record labels to continue bringing their music to our audiences on whatever platform they want to use.”
SoundExchange presented a strong case on the fair market rate for music played by webcasters utilizing the statutory license. Our rate proposal used data from dozens of marketplace deals and was based on what willing buyers and sellers would agree to.
“Music has tremendous value and is the core foundation of the webcasting industry. It’s only fair that artists and record labels receive a market price when their music is used. We believe the rates set by the CRB do not reflect a market price for music and will erode the value of music in our economy. We will review the decision closely and consider all of our options.
“Additionally it is deeply disappointing to see that broadcasters are being given another unfair advantage. In their terrestrial business they do not pay a dime for the recordings they use and now this $17B industry will receive an additional huge subsidy on the music they use in webcasting.
“As music advocates, SoundExchange represents the entire recorded music industry and we remain united on the principle that recording artists and rights owners deserve a fair market rate when their music is used.
“SoundExchange appreciates the efforts of the CRB judges and staff throughout this process.”