NPR/CPB licensing agreement with SoundExchange: +17% for 2016-2020

RAIN News has learned that NPR and the Corporation for Public Broadcasting have agreed to a 17% music licensing rate increase for the 2016-2020 royalty period. The new rate anchors an agreement between the nonprofit public media outlets and SoundExchange, the royalty collection and distribution entity representing artists and record labels to webcasters. (See our report of the agreement here.)

The royalty rate is more modestly increased than in the previous cycle, when the public outlets took on a 30% hike for 2011-2015. Government regulated webcaster payment rates to labels are set every five years. The U.S. Copyright Royalty Board’s sanction of the latest deal between SoundExchange and NPR/CPB is required for the rates to lock in starting January 1, 2016.

Rates for non-commercial webcasters can be structured differently from per-play rates set for commercial companies like Pandora. In this case (and in the past for these parties), a flat rate provides blanket license. RAIN News learned that the blanket rate for NPR/CBR will be $560,000 per year, up from $480,000 per year currently (since 2011), a 17% rise.

Following are the flat-rate royalty details since 2006. Information about the 2006-2010 period was obtained from David Oxenford’s Broadcast Law Blog, here.

• 2006-2010: $1.85M = $370,000/year
• 2011-2015: $2.4M = $480,000/year (+30%)
• 2016-2020: $2.8M = $560,000/year (17%)

In its formal announcement of the agreement, SoundExchange emphasized the difference between commercial and non-commercial rate setting, referring to “the unique nature of public radio and the vital service it provides to the American people.”