June 30, 2021
After delaying the Web V decision until June 11, 2021, the Copyright Royalty Board granted sound recording artists and rights owners a win with its royalty rate increases.
The CRB set royalty rates for 2021-2025 at $0.0026 per performance for paid services and $0.0021 per performance for ad-supported services—a close step down from the creator-friendly SoundExchange proposal. The rates are less than SoundExchange’s request of $0.0031 for subscription streams and $0.0024 for ad-supported non-subscription streams, but they are far from the cuts sought by Pandora/Sirius XM, the National Association of Broadcasters, and Google/YouTube.
“This CRB decision means that creators will be compensated more fairly when their recordings are played on digital music services,” says SoundExchange CEO and president Michael Huppe. “While the rates are lower than SoundExchange and others proposed, they still signal positive movement toward building a healthier music economy.”
There were other key aspects to this decision that impact the industry. The CRB set the annual minimum fee for commercial webcasters at $1,000 per channel or station, capped at $100,000 for each licensee. For noncommercial webcasters, the CRB set the annual minimum fee at $1,000 per channel or station, which covers 159,140 listening hours each month, and $0.0021 per-performance rate for all transmissions in excess of 159,140 listening hours. As before, 5% of royalties collected will be applied to the ephemeral license, and the per performance rates will be subject to yearly adjustment based on cost-of-living changes in the consumer price index.
SoundExchange is pleased that these rates bring artists and rights holders closer to the earnings they deserve. “We haven’t fully closed that gap,” says Huppe, “but [the decision] is a step in the right direction.”