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ATH royalty payment option off the table in '08

Posted on: 01/02/2008

“With 2008 upon us, webcasters streaming music on the Internet need to remember that the way of computing and paying royalties to SoundExchange will shift on January 1- a change that may be especially important for broadcast stations.

“Under the Copyright Royalty Board decision reached last March, webcasters must pay royalties computed on a per “performance” basis…

“While broadcasters objected that they did not (and in many cases could not) track the number of performances that were made by their stations on the Internet, the CRB, on reconsideration of their initial decision, only went so far as the give stations an interim rate based on the number of ‘Aggregate tuning hours’ that a station served (e.g. one listener listening for one hour, or two for a half hour each would both be the equivalent of one aggregate tuning hour).

“The aggregate tuning hour (or ATH) metric is one that is more readily obtained from a content delivery network or other bandwidth provider, and a metric that has been used since the first royalties were established in 2002. Yet as of January 1, as the interim ATH rate applied only to 2006 and 2007, that method of payment will no longer be available, and many webcasters are wondering what to do to compute the per performance royalty.

“Neither the CRB decision nor SoundExchange, which collects the royalties, explained what a webcaster who cannot count performances is to do when the option to pay based on aggregate tuning hours disappears… Many Internet radio companies have been trying to determine how to count performances and, while there are some services that offer to provide software to do so, it is my understanding that none are foolproof and, in some cases, they may not be able to get a complete count of performances. And many smaller stations may not be able to afford such systems.

“Several companies including Ando Media, Abacast and Liquid Compass offer services that will count the number of listeners to a stream and synchronize those numbers with the songs that are being served by a station’s music scheduling software to compute a number of performances. Reports of use for filing with SoundExchange are also prepared. We have not tested these services and cannot endorse them, but are providing this list for informational purposes for webcasters to explore further…

“However, as I understand it (and perhaps some readers can correct me if I am not correct), not all of these systems are foolproof. One of the biggest issues is what happens when music does not run through a station’s music scheduling software? For instance, if a station is picking up syndicated programming where the syndicator selects the music and the music does not run through the station’s scheduling software, some of these services may not be able to track the performances that result from such the webcast of such programs.”

Read the entire post at the Broadcast Law Blog

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