This guest column is by broadcast law attorney and frequent guest contributor David Oxenford. The article was originally published on his Broadcast Law Blog.
A year ago, when the Copyright Royalty Board adopted the rates for webcasters (including broadcasters who simulcast their programming by online streaming) to pay for the sound recording performance royalty (see our summary here and here), one difference from previous decisions is that there was a single per-song, per-listener royalty adopted. In the past decisions, the CRB set royalties at the beginning of a 5 year term that generally rose each year of that term. This time, the rates – $.0017 per song per listener for nonsubscription performances, and $.0022 per song per listener for subscription listeners – did not automatically go up each year. Webcasters were successful in arguing that, when they pay on a per song per listener basis, their costs increase as their audience increases, but the value of each play of a song does not itself increase each year. While the CRB did not build in a stepped increase in the royalties each year, they did include a provision for royalties to increase to reflect changes in the cost of living – so that inflation did not erode the value of each play.
In today’s Federal Register, the CRB published a notice of its computation of the cost of living increase for 2017 – finding that inflation has not gone up significantly, so that the per performance rates (rounded to the hundredths of a cent) will not rise in 2017. So the rates arrived at in December 2015 and effective for all of the current year will remain in effect for 2017. Note that the rates established in 2015 are still subject to an appeal filed by SoundExchange (noted in our article here) that should be argued in 2017. But, until then, Internet radio operators can continue to pay at the rates at which they are currently paying, with no increase for 2017.