On January 27th, SoundExchange presented a webinar for music service providers and webcasters to address licensing options for services, materials that services need to submit, and what happens to the royalties SoundExchange collects from services. During the event, we asked the 60+ participants to ask us their toughest questions about SoundExchange and statutory licensing.
Below are those questions, with responses from our team*. They’re presented in the order they were asked (we’ve removed names and contact information for privacy).
Also, many thanks to our special guest: Kevin M. Goldberg, First Amendment, Copyright and Trademark Counsel, Fletcher, Heald & Hildreth PLC who can be heard on this recording talking about protecting one’s business and the nitty-gritty of sound recording licensing.
Need a copyright or licensing how-to? Check out the full video below, or on YouTube:
Questions and Answers:
1) I have not yet started my Internet radio station, but will shortly. What fees must I pay? How much? When? Thank you.
It depends upon a large number of factors including the kind of service you are providing, and the size of your audience, among other things. You can start with this quiz, which we designed to help you figure out what service type you’ll be. Then just click through to the rate table for your service type, and it will give you all the details. More details can be found on our Licensing 101 page. Alternatively, you may select the agreement you wish to operate under. All rates and terms are subject to eligibility requirements.
2) If churches want to webcast services, are there special considerations, or do they need to follow microcaster guidelines?
SoundExchange and the National Religious Broadcasters Music License Committee made a deal under the WSA in 2009. The terms for these noncommercial stations include a reduced per-performance rate from the CRB rate set in 2007 and a more lenient recordkeeping requirement. You can read more about those rates and terms here: Small Non-Comm Webcaster
3) Do you have recommendations for software that can report per performance?
There are a number of available options for this, many of them incorporated into a streaming platform or aggregation service. There’s no solution that’s right for everyone, so we encourage you to look into options. Kevin says an investment in good reporting software can definitely pay for itself in avoiding man-hours and overpayments that can come with doing it by hand.
4) Can you recommend reporting software?
Please see question #3.
5) The spreadsheets are quite confusing. Will there be a more active effort on your end to clean up the errors and formatting issues of your spreadsheets? I not only have to back into most of your calculations after hours of work but doubt the validity of the end result given I cannot tell what i will owe each month…
We assume by “spreadsheets” you mean our statement of account forms. We test them internally before posting them online, but accidents do happen. If you encounter an error in a formula, or need assistance in completing them, please do not hesitate to contact us directly at L&E@soundexchange.com.
6) Explain why a multi-movement work (divided among tracks) by a classical music composer is not considered a single artistic work i.e. one song.
The performance complement, which contains this distinction, was not designed with classical work in mind. The provision is part of the copyright statute, and isn’t an SX policy or something we have a stance on at all. Some copyright holders, including those who own the rights to classical works, have been willing to waive part of this provision to allow multi-movement works to be played in their entirety, but you should contact the owner directly to learn their policy.
7) Are there any programs that you know of that will help me to automate the reporting of my broadcast such as the performances, artists and label info?
Please see question #3.
8) Why is “record label” a required for the report? You guys must be aware that that information is not included in a standard ID3 tag, right?
The section of the copyright code that SoundExchange operates under mandates the division of royalties between the performer on a track and the owner of the master recording, which in many cases is a record label. We know this information isn’t always included in track metadata. The lack of standards in music data is a problem faced industry wide, and something we’ve spoken about on several occasions (see here in Billboard and KnowTheMusicBiz).
9) On “separate channels” – can a “channel” be used for different purposes at different times? For example, if a station had a “holiday music” channel during the holidays, which replaced a regularly scheduled jazz channel, would that be considered two channels, or one channel that temporarily changed formats? And on that note, is there any technical definition of channels on the web? Any relationship between channels and URLs?
If the two formats don’t ever run concurrently (that is, the same url and feed changes content, but there’s only one stream of content at any one time) it can be considered as one channel. That said, we always recommend you consult a qualified lawyer familiar with your service.
10) Can we get the notes from today’s webinar?
You can get the full video above!
11) If you perform copyrighted material, do you report through SX and ASCAP, or will performances on the web be totally covered through SX?
Every musical recording embodies two distinct copyrighted works. The first is the underlying musical composition, comprised of the written notes and lyrics (a “musical work”). The songwriter and/or his or her music publisher usually own the copyright in the musical work. The second copyrighted work is the actual recording itself – the sounds, including the recording artist’s interpretation of the musical composition, and the creative efforts of the producer, sound engineers and background musicians. (This is referred to in copyright law as a “sound recording.”) A copyright holder, whether a label or an independent musician, owns the copyright or ‘masters’ to the sound recording. SoundExchange collects and distributes royalties associated with the sound recordings made by services operating under one of the statutory licenses. By contrast, ASCAP, BMI and SESAC collect and distribute royalties associated with the public performance of musical works. A digital audio transmission of a musical recording may require a license for both the sound recording and the underlying musical work, and therefore from ASCAP, BMI or SESAC in addition to SoundExchange.
12) How about a peek behind the curtain…How does a musician or singer on a recording actually gets paid…especially those from long ago.
For 2010, the median artist payment for the year was just shy of $3,000. For copyright holders, the median payment was $14,000. For artists who own their own masters, and therefore claim both shares on each track, the median payment was over $5,000. Per play, though, the rates are exceedingly low – it takes about 12,000 plays on a pureplay radio station for the artist-owner to make $10 in royalties.
13) For stations that broadcast under 159,140 ATH can SOAs be submitted annually as opposed to monthly?
Most noncommercial services have a monthly threshold of 159,140 ATH before being required to submit a form for that month’s usage. Noncommercial Webcasters operating via the Webcaster Settlement Act (apart from Noncommercial Microcasters) are the exception; they are required to submit a monthly usage form, even if they do not exceed the threshold.
14) Can you recommend webcasting reporting software?
Please see question #3.
15) What about issues resulting from id3 tags that do not contain all that expected and need information in order for us to report with these programs.
We know this can be very frustrating, particularly when the artist or album isn’t well known. The lack of metadata standards is an industry-wide issue, and many of us feel like we’re getting the brunt of it. The responsibility for good reporting falls on the user of the tracks, by law. That means if you feel you can’t appropriately report with the information attached to the track, you can 1) research the information 2) ask the provider of the track to fill in the data or 3) choose not to play the track. But proper reporting, even when it’s inconvenient, is mandatory under the statutory license – failure to report well violates the license, and may rise to the level of copyright infringement. No one knows as well as we do the problems that bad metadata can cause, but we all play a role in fixing those problems – the role of services is in reporting properly, every time.
16) As a non-commercial station but not with a college, we have been reporting 2 weeks of each quarter. Has that changed for 2011?
Under the terms of the webcaster agreements, as well as the default rates and terms, there are very few exceptions that still allow sampling: namely, small broadcasters simulcasting a terrestrial radio station signal, microcasters (defined as services with less than 44,000 aggregate tuning hours per year) and college stations. These exceptional services may pay an additional $100 proxy fee in lieu of providing reports of use. In all other cases, census reporting, including track-level data, should be supplied in accordance with applicable regulations.
17) If I give a *brief* list of “non-interactive” Web Radio companies can you tell which license category they operate under? Hypem.com – Pandora.com – MOG.com
We can’t comment on specific licensees, as it’s technically their private financial data. Pandora’s been quite public about being part of the PurePlay WSA agreement. If you’re interested, the Copyright Office offers a public record of services who have notified the government of intent to use the statutory license which SoundExchange administers. To view the list, go to http://www.copyright.gov/licensing and select the most recent entry from the table marked “Notice of Use of Sound Recordings.” The latest list was released in December 2010, and can be found here http://www.copyright.gov/licensing/notice-use-2010-12-20.pdf(PDF).
18) How does a station get a reporting waiver?
Reporting waivers are available to a very small subset of services – usually those with very low listenerships. For more information about the standard reporting requirements, please visit Reporting Requirements. If you are not eligible for that small subset of services, you must report in accordance with the statute. See also question 21.
19) How much will it cost me to stream an online radio station?
Please see question #1.
21) Standard reqs are monthly submissions of music reports-modified reqs for Non-prof 501C3 Orgs have a Qrtrly reporting option. I opted for the qrtrly reporting in 2010. Clarify if we can still opt for the Qrtrly reporting?
If you are a service that elected as a webcaster via the Webcaster Settlement Act (commercial or noncommercial), then your requirements are the same as last year. Please review your category of webcasting for more information: http://soundexchange.com/service-provider/rate-tables/. If you are a FCC-licensed AM or FM station that does not exceed its minimum fee, then you are eligible to submit a two week “sample” on a quarterly basis. Noncommercial Educational Webcasters also have options for quarterly sample reporting: http://soundexchange.com/service-provider/rate-tables/non-commercial/nc-alternative-rate-structures/non-commercial-education-broadcasters/. For more information about the standard reporting requirements, please visit this link (link to http://soundexchange.com/service-provider/reporting-requirements/)
22) What are the differences (if any) between 2010 and 11 forms? Where do I get 2011 forms?
The format of the statement of account forms are, for the most part, identical. There may be minor changes to the text, but any substantive changes would probably relate to any differences in the rate from 2010 to 2011 (if any). If you need assistance in completing any of our forms, please contact us directly. The forms are on our website at http://soundexchange.com/service-provider/how-do-i-pay/
23) Music Directors contracted for our recordings were paid in full, no royalties. Music Director named as opposed to releasing them as “Starborne Strings” or similar. What standing do I have in reference to the artist royalty?
The law says artists’ royalties are non-recoupable and non-transferrable, no matter the contract. So only the performers on the track have the right to claim that royalty.
24) We’ve heard of stations providing a 5-hour archive of some of their specialized Music programming as allowed by the DMCA (2 week avail, non-downloadable). Would there be a reporting requirement?
Archived programming that is performed in reliance on the statutory license would need to be reported just like any other programming. Please see review the specific requirements for each category of webcasting for more information, by visiting this link: http://soundexchange.com/service-provider/rate-tables/
* Questions of a personal or account-related nature were answered directly but cannot be posted publicly. Also not included here are comments which related only to the execution of the webinar (can Colin speak up?, etc).