 RAIN 8/10: New details emerge on various webcaster settlement deals ·Aug 10, 01:51 PM Last week, SoundExchange announced it had reached royalty rate agreements SIRIUS XM DEAL COULD APPLY TO OTHER NON-BROADCAST COMMERCIAL STREAMERSThe royalty deal between Sirius XM and SoundExchange announced last week (RAIN coverage here) does not cover music broadcast on the company’s satellite channels, only music streamed by Sirius XM online. Interestingly, the agreement is also open to “any webcaster who is not a ‘Broadcaster’ as defined in the NAB Settlement.” The deal requires Sirius XM (and eligible webcasters) to pay a per-performance rate (as opposed to paying a percentage of revenue).
Oxenford compares the Sirius XM deal to the settlement reached by the NAB for broadcasters simulcasting on the Internet. While in the first few years, SiriusXM and webcasters who elect this deal will be paying more for streaming music than broadcasters under the NAB settlement, further down the road the situation reverses. Beginning in 2013, the rates available in this deal are actually lower than those available to broadcasters at this time, “meaning that they present a better deal for webcasters expecting their audiences to grow in the next few years.” This deal does not apply to Sirius XM’s satellite radio channels, only their channels streamed online. They pay a royalty rate of 6-8% of annual revenue for music delivered via satellite. The drastic difference between the CRB-determined royalty for Sirius XM’s satellite programming and its determination for webcast royalties (which was the starting point for this negotiated settlement) originates in the CRB’s use of different standards in its determinations. By law, the CRB based its royalty determination for the satellite rate on a clause in the Copyright Act referred to as 801(b). The CRB based its webcast royalty decision on the vastly different standard known as “willing buyer willing seller” (read more about how the CRB uses legal standards to determine royalty rates in RAIN here). The use of these differing royalty determination standards results in different rates for similar music services, creating an unlevel playing field and prompting webcasters to call for “platform parity,” as they did before the Senate Judiciary Committee last week (RAIN coverage here). NON-COMM RELIGIOUS DEAL OPEN TO ALL NON-COMM WEBCASTERSThe royalty deal with religious webcasters is actually open to any noncommercial webcaster. The agreement requires a $500 per-channel fee and per-performance fees if a webcaster exceeds a monthly ATH cap. If they do exceed this ATH cap, the per-performance rates set in this deal are 2/3 lower than those stipulated by the CRB. The agreement covers royalties from 2006 to 2015. For more on this deal, read Oxenford’s detailed coverage here.EDUCATIONAL WEBCASTERS GET POTENTIALY HIGHER RATES, BUT LESS RECORDKEEPING REQUIREDThe deal for educational noncommercial webcasters, however, only covers royalties from 2011 to 2015. The deal is similar to the one for religious noncommercial webcasters, with a $500 annual per-channel fee and per-performance fees charged if a station exceeds a monthly ATH cap. However, under these terms, an operator who exceeds the monthly ATH cap will pay three times what the religious webcaster pays — essentially the commercial broadcaster rate!However, this deal requires far less rigorous record-keeping than the religious webcaster deal. The thinking here is that a college radio webcaster likely won’t get a ton of listening, and has few resources to keep track of everything that gets played. This is in contrast to large, well-organized religious webcasters who attract far larger audiences and have the means to maintain accurate play records. Oxenford has more coverage on this royalty deal here. CORPORATION FOR PUBLIC BROADCASTING SETTLE ON RATES UNTIL 2015The Corporation for Public Broadcasting already had a royalty rate deal with SoundExchange (RAIN coverage here), but this previous agreement only covered royalties from 2006 to 2010. The newly announced deal covers 2011 to 2015.
Public radio stations (including NPR, American Public Media, Public Radio International, and the Public Radio Exchange) will submit a mass payment of $2.4 million to SoundExchange in five yearly installments. However, if stations exceed music play ATH caps, they must pay per-performance rates. These rates are lower than those dictated by the Copyright Royalty Board. “If the covered stations stream anywhere near the Music ATH caps set forth above, that discount would be significant,” writes Oxenford. “For CPB affiliated stations, this settlement provides security through 2015 to allow them to build their Internet radio audiences.” He has more details on the agreement here. SOUNDEXCHANGE DICTATING WHICH TERMS CAN BE USED AS A PRECEDENT FOR FUTURE RATESIncluded in all these deals is a stipulation from SoundExchange as to whether the agreement’s rates can be used by the Copyright Royalty Board as a “precedent” in deciding the new royalty rates for 2011 through 2015. In deals where the per-performance fees are similar to those set in the NAB agreement — such as those for Sirius XM and educational webcasters — SoundExchange has allowed the deal to be precedential. In agreements where rates are much lower than the NAB rates (religious webcasters, CPB and even the pureplay webcaster deal announced in early July), SoundExchange has ruled that the CRB cannot consider the included rates. “SoundExchange seems to be trying to make [the NAB rates] the standard for per performance fees that they will use as a benchmark in the upcoming proceeding to set royalties for 2011-2015,” Oxenford (pictured left) notes. Real Networks’ Bob Kimball raised this issue before the Senate Judiciary Committee last week, RAIN coverage here.
To read more about the previous royalty deals between webcasters and SoundExchange, read RAIN‘s royalty round-up, found here. share: del.icio.us.  Reddit  Digg  Yahoo  Wink  Windows  Google  Newsvine 
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with four webcaster groups, just ahead of the deadline set by the Webcaster Settlement Act of 2009 (
