SoundExchange has reached an agreement with NPR and the Corporation for Public Broadcasting that sets royalty rates for webcasting for the next five years.
In doing this, both parties shortcut the Copyright Royalty Board (CRB) rate-setting process which started last year, and will conclude in December when the CRB announces new webcaster music licensing rates for 2016-2020. That process is contentious, with legal arguments and refutations submitted by suppliers (mainly SoundExchange, representing the record industry) and distributors (webcasters, both Internet pureplay and traditional radio streams).
“We always prefer negotiated solutions with digital services, provided that they ensure appropriate payment to artists and rights holders,” SoundExchange CEO Michael Huppe said. “This agreement recognizes the unique circumstances and missions of these organizations, and compensates the creators of the music used in their programing.”
The language of that statement (“unique circumstances and missions”) reflects the non-profit status of NPR and CPB. Broadcast law attorney David Oxenford has written about why publicly funded webcasting differs from commercial webcasting in the licensing realm: “Public radio and religious organizations usually are not motivated by the kinds of commercial considerations that give rise to evidence submitted under the ‘willing buyer willing seller’ standard applicable to all CRB webcasting royalty decisions.”
Previous negotiated deals between SoundExchange and public radio have included flat-rate payments that cover a certain number of stations, and/or aggregated listeners. Above those threshholds, a pre-play rate might kick in, similar to how commercial webcast music licensing is governed. SoundExchange did not immediately respond to our request for details of this agreement.
Today’s announcement marks SoundExchange’s second settlement with noncommercial webcasting in the past five months, following on the heels of an agreement with College Broadcasters Inc. in October 2014.
SoundExchange is a major participant in the drawn-out CRB rate-setting process. Most recently, it issued a rebuttal of Pandora’s rate arguments (see our coverage here).
The settlements announced today will need to be adopted by the Copyright Royalty Board before taking effect on January 1, 2016.