SoundExchange ‘Pleased’ With Royalty Rate Ruling

SoundExchange ‘Pleased’ With Royalty Rate Ruling

SoundExchange was pleased with the decision of the Copyright Royalty Board (CRB) on the Determination of Rates for non-interactive webcasting services for the period 2011-2015. The rates announced Tuesday will serve as the ‘default’ royalty paid for the use of sound recordings in webcasts. Although the CRB did not adopt all aspects of SoundExchange’s proposal, SoundExchange was encouraged to see the Board once again uphold and defend the value of those recordings through gradual rate increases during the next term. As the nonprofit performance rights organization responsible for collecting and distributing digital performance royalties to recording artists and copyright holders, SoundExchange appeared before the Copyright Royalty Board earlier this year on behalf of the thousands of royalty recipients the group represents.

The CRB decision establishes rates applicable through 2015, with pre-set increases to reflect the rising value of sound recordings. Currently, CRB commercial rates for 2010 are $0.0019 “per performance” (the rate that is charged per listener, per track) – royalties which are distributed by SoundExchange to the artists and rights owners who helped to create that recording. The new rates that were set for commercial webcasters who are not broadcasters begin at $.0019 per performance in 2011, with gradual increases to $.0023 by 2015. The Copyright Royalty Judges also adopted the “broadcaster” rates that were the subject of SoundExchange’s settlement with the NAB in 2009. Under that settlement, broadcasters’ per-performance rate starts at $.0017 in 2011 and rises to $.0025 by 2015.

SoundExchange reached settlements with over 90% of the webcasting market last year. The only commercial webcaster to participate in the rate setting proceeding was Live365, which asked the Copyright Royalty Judges to cut the current rates by more than half, and rejected future increases to. SoundExchange is pleased that the Copyright Royalty Judges rejected Live365’s request and continued to acknowledge the value of music.

“We prefer to work with webcasters as partners and not adversaries, and we have been flexible in reaching numerous business solutions to benefit the industry as a whole,” said Michael Huppe, Executive Vice President and General Counsel at SoundExchange. “When necessary, however, we stand ready to defend artists and rights owners to ensure that they are fairly paid for the use of their creative property.”

Huppe added, “These new rate adjustments are the latest move in our licensing system – a system that has allowed America to lead the world in the webcasting boom. We look forward to that continued growth, which underscores the vibrant and exciting future for everyone – including consumers and webcasting services.”

The CRB also issued the noncommercial rate structure that SoundExchange proposed, and adopted the settlement reached with College Broadcasters, Inc. for noncommercial educational webcasters.

A PDF copy of the full text of the decision can be found here.