 CRB denies SX for more satellite money, but where's fairness for webcasters? ·Jan 14, 12:14 PM
The decision, which set royalties at 6 to 8% of revenues of these services, and the denial of the rehearing motion, provide examples of how the CRB applies the 801(b) standard of the Copyright Act. The matter of 801(b) vs. “willing buyer, willing seller”In setting royalties, that standard assesses not only the economic value of the sound recording, but also the public interest in the wide dissemination of the copyrighted material and the impact of the royalty on the service using the music. The satellite radio decision sets a royalty far lower than that assessed on Internet radio – where the royalty is set using a ‘willing buyer, willing seller’ standard looking only at the perceived economic value of the sound recording.
That willing buyer, willing seller standard is also proposed for broadcast radio in the recently introduced performance royalty bills now pending before Congress… Too high a royalty would “disrupt” satellite industry“In the denial of the rehearing motion, the Board rejected SoundExchange’s request that the royalty adopted by the Board excluded too much of the revenue of the services…“In the initial decision, the Judges distinguished the percentage of revenue royalty used in satellite radio from that used in the Webcaster decision, finding that in the Webcaster case, there was difficulty in determining what revenue would be subject to the royalty. In doing so, the CRB ignored the formulation offered by the Small Webcasters in the Internet radio case who had proposed… a royalty on the entire amount of revenue that a service generated… “The rate that was set for the satellite radio services was based on a process similar to that which they used for setting the Internet radio royalty – the Board looked for comparable marketplace transactions on which to base a rate. In assessing the rates that would be charged to the services in a marketplace transaction, the Board came up with a 13% rate… However, as Section 801(b) applied to this case, the Board looked at the possible disruption to the satellite radio services that would occur if that rate was to be applied. As the Board found that a 13% royalty would cause substantial disruption, it adjusted the rate to one that begins at 6% and increases to 8% over the term of the royalty. “Fairness” apparently a one-way street“While SoundExchange is arguing to Congress about the ‘unfairness’ of radio not paying a royalty when digital services do, no one seems to recognize the inherent unfairness of differing standards as applied to different services. Even the new broadcast performance royalty bills perpetuate that unfairness – allowing broadcasters with less than $1.25 million in revenue to pay a flat $5,000, while webcasters with the same revenue would pay royalties twenty-five times that amount, even under the small webcasters deal offered by SoundExchange. Where is the fairness in music licensing?”Read David Oxenford‘s entire blog post here. share: del.icio.us.  Reddit  Digg  Yahoo  Wink  Windows  Google  Newsvine 
Comment Other stories RAIN 09/05: DiMA's Potter disputes SoundEx's "lack of webcaster monetization" argument RAIN 09/04: "Mission accomplished" for HD Radio Alliance RAIN 09/03: Brian Parsons joins Triton Media RAIN 9/2: Broadcasters should be on "as many wireless devices as possible," says Greater Media VP RAIN 08/29: BBC PLANS MASSIVE MUSIC STREAMING SERVICE RAIN 8/28: RIAA lobbying for radio royalties at political conventions RAIN 8/27: Analyst warns investors away from "long-term loser" music industry RAIN 8/26: In heavyweight online radio battle, CC readies "I Heart Music" to take on CBS RAIN 8/25: Chrysler's in-car Internet launches RAIN 8/22: Pandora's fight is radio's fight, says industry research expert |
From David Oxenford in the Broadcast Law Blog: “This week, the 
SoundExchange has a rather flexible definition of “fairness,” so the dissonance between their positions probably doesn’t pose any real problem for them.
By pointing out that the CRB webcaster process involved extensive hearings and exhibits and a full exploration of the issues, SoundExchange attempted to publicly shame the webcasters for legally challenging the CRB rulings. Since the process was “fair,” John Simson said, the results had to be “fair.”
Yet, this time, SoundExchange had no problem asking for reconsideration of a decision it didn’t like after an equally long and detailed “fair” process.
Funny how that works out.
— Fred Wilhelms · Jan 14, 01:55 PM · #
The ONLY real solution here is for ALL broadcasters, webcasters, and satcasters to place a ban on SoundExchange music and refuse to play and promote it. Of course, this is not going to happen so get your wallet out and prepare to PAY, PAY, PAY.
— Frank Gagliano · Jan 14, 09:57 PM · #
The road to fairness is not paved with bricks but with dollars.
Not with artistry but with equity.
We have since this started began to boycott soundexchange music and limited our services to a podcast.
This really is a disservice to the artists and listeners, and was a difficult decision to make.
But, there are literally millions of artists whose music is just a credible and in most cases just as good if not better than.
— John ODay · Jan 15, 11:12 PM · #
I just hope that Congress can resolve this royalty issue soon and establish rates based on a percentage of revenue that will enable Internet radio to grow and prosper, thereby securing ‘fair’ and abundant royalty payments to artists for many years to come! DO THE RIGHT THING CONGRESS!!!
— JP · Jan 16, 09:27 AM · #