Copyright Royalty Board Releases Decision - Rates are Going Up Significantly

The Copyright Royalty Board decision on the royalties for to be paid by Internet Radio stations for streaming music during the years 2006-2010 was released to the participants in the proceeding today. And the rates are going up significantly over the next few years. More importantly, especially for smaller entities, there are no royalty rates based on a percentage of revenue as were in effect for small webcasters under the Small Webcasters Settlement Act. Instead, all royalties are given as a per performance number, i.e. a payment for each song every time a listener hears that song

In a 100 page decision, the Board essentially adopted the royalty rate advanced by SoundExchange (the collective that receives the royalties and distributes the money to copyright holders and performers) in the litigation. It denied all proposals for a percentage of revenue royalty (including a proposal that SoundExchange itself advanced). The Board also rejected any premium for streams received by a wireless service, as SoundExchange had suggested.

The rates set by the Board for commercial webcasters, including broadcasters retransmitting their over-the-air signals on the Internet, are as follows:

2006 - $.0008 per performance

2007 - $.0011 per performance

2008 - $.0014 per performance

2009 - $.0018 per performance

2010 - $.0019 per performance

The minimum fee is $500 per channel per year. There is no clear definition of what a "channel" is for services that make up individualized playlists for listeners.

For noncommercial webcasters, the fee will be $500 per channel, for up to 159,140 Aggregate Tuning Hours (one listener listening for an hour) per month. Noncommercial webcasters who exceed that level pay at the commercial rate for all listening in excess of that limit.

The decision is subject to Motions that confidential information be redacted to the public, so it is not yet released for public review. A request for rehearing of this decision can be made by any party to the case within 15 days. The Board can also make technical corrections to the decision (not affecting the rate). The decision is to be published in the Federal Register within 60 days. Appeals may be filed with the US Court of AppeaIs in Washington, DC within 30 days of Federal Register publication. As this decision may well significantly impact webcasters, large and small, there is no doubt that more will be heard on this decision in coming months. We'll have more details on this decision in coming days.

-- Edited by Ruby at 21:19, 2007-03-02