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News Flash: CRB issues webcast royalty decision for 2011-2015

Posted on: 12/14/2010

MOST WEBCASTERS WILL STILL PAY ACCORDING TO SEPARATELY ARRANGED DEALS, HOWEVER

The Copyright Royalty Board has issued its determination for statutory webcast royalty rates for the upcoming term of 2011-2015. The rates are reviewed by the Board in five-year terms.

Keep in mind that these new rates, if finalized by the Librarian of Congress, would pertain only to webcasters that are not party to special agreements with SoundExchange. In 2009 SoundExchange and various groups of webcasters announced deals outside of the statutory terms.

The rates suggested by the CRB to be formalized by the Librarian, and subject to appeal by eligible parties, are as follows:

2011: $0.0019 per peformance
2012: $0.0021 per peformance
2013: $0.0021 per peformance
2014: $0.0023 per peformance
2015: $0.0023 per peformance

A music service operating under the statutory webcast license would, in 2011, pay $0.0019 per “performance” (that is, one song heard by one listener) to SoundExchange. To put that into perspective, a webcaster with an average audience size of 5,000 listeners, who plays an average of 16 songs per hour, would owe:

$0.0019 * 5,000 listeners * 16 songs * 24 hours * 365 days =
$1,331,520 for the year of 2011.

That rate will increase around 10% in 2012 and again in 2014.

The 1998 Digital Millennium Copyright Act mandates that U.S. non-interactive digital music services (like Internet radio) pay the owners of copyright sound recordings for the right to perform those recordings. The DMCA stipulates that the copyright owner, usually record labels, pass 50% of that payment to performers. Broadcasters are not liable for music they play over the air.

As mentioned above, most webcasters are already party to deals that license them outside of the CRB terms. Pandora, for instance, is part of what’s called the “Pureplay” agreement. As an operation with over $1.25 million in annual revenues, Pandora pays the greater of 25% of total revenue or a per-performance rate (that has increased from $0.0008 in 2006 and will continue to $0.0014 in 2015). A sub-group of the “pureplay” operators includes “small webcasters” (like AccuRadio), who have a slightly different deal.

Other groups with deals outside the statutory terms include public radio webcasters (CPB-supported stations, NPR members, etc.), commercial broadcasters (via the “NAB” deal), and very small webcasters (or “microcasters”).

As a condition of the agreement, webcasters agreeing to these deals are not allowed to appeal the CRB’s determination.

For more background, see our royalty rundown here.

(from earlier today…)

AMERICANS NOW USE INTERNET AS MUCH AS WATCH TV

Average Americans now spend as much time surfing the Internet as they do watching TV, according to a new survey from Forrester. “The stat marks a big shift for the country at large,” writes The Wall Street Journal. “This is the first year in Forrester’s survey that people have reported spending equal amounts of time on the two activities — 13 hours a week.”

Forrester says Internet usage has grown 121% over the past 5 years. At the same time, Americans are spending less time reading newspapers offline or listening to over-the-air AM/FM radio. They spend 6 hours a week on average listening to terrestrial radio, down 15% since 2005.

Though Forrester argues streaming radio online will never be as dominant a practice as something like e-mail, they found that 40% of “Gen Yers” listen to Internet radio. Additionally, 17% of online mobile phone owners use their devices to listen to music, including streaming radio. That’s up from 5% in 2008. You can find more on Forrester’s research from WSJ here and MediaPost here.

CHRISTMAS RADIO, MTV, PURE DEVICES AND MORE IN TODAY’S NEW ROUND-UP

There’s quite a bit of news blowing around out there today! RAIN rounds up the most interesting items below:

  • BRS Media’s Web-Radio listing of Internet radio streams now includes over 500 Christmas music stations — a new record. BRS Media reports that 75% of terrestrial stations playing Christmas music are streaming online. That’s up from 60% in 2008. Find the company’s press release here.
  • Non-profits, including some from public radio, are getting annoyed at Apple for not allowing in-app donations. Instead, apps must send users to outside websites to donate — a “cumbersome” solution, according to some. Find The New York Times’ coverage here.
  • Pure’s line-up of Flow Internet radio receivers have arrived in the U.S. in time for the holidays. After some delays, the EVOKE Flow, Oasis Flow and Siesta Flow are now available for $229, $249 and $109 respectively. Engadget has more coverage here.
  • MTV has launched a new music discovery website. Dubbed the MTV Music Meter, the site (here) lists the top 100 up-and-coming artists every day. Wired has more coverage here.
  • Reps from NPR and Bonneville spoke about radio’s digital transition at Jacobs Media Summit. They said radio was approaching “sink or swim time” for digital. “I feel we’re behind,” said one Bonneville rep. Inside Radio carried the original story. Subscribe here.


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