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The Copyright Royalty Board Releases Decision on Webcasting Royalties for 2016-2020 (Webcasting IV)

By Barry Skidelsky, Esq.

The Copyright Royalty Board (CRB) recently released its full decision (http://www.loc.gov/crb/web-iv/web-iv-determination.pdf) concerning royalites that webcasters must pay to Sound Exchange for the public performance of sound recordings that are digitally distributed over the Internet and to mobile devices.

For most commercial webcasters who stream (including FCC licensed broadcasters), the royalty rate actually dropped, which may be the first time in any CRB proceeding where rates went down as the result of a CRB decision. The CRB essentially left in place the rates for non-commercial webcasters. The subscription rates for "pure-play" webcasters (such as Pandora) also decreased, although their non-subscription rates saw a modest rise. All rates are subject to periodic cost-of-living increases.

Most royalty terms remain unchanged from prior years, including requirements for payment of minimum fees at the end of each January in addition to payment of monthly fees. Sound Exchange audits must still be performed by a CPA, a requirement that the music licensing collective had sought to eliminate.

Although prior settlements allowed small commercial webcasters to avoid certain regulatory burdens and pay based on a percentage of their revenue (rather then be subject to the more complicated per-performance formulas generally used as part of the United State's balkanized approach to music copyright licensing), there were no small commercial webcasters who litigated this proceeding (known as Webcasting IV), which obviously precludes their direct participation in any possible appeal. It remains to be seen what actions, if any, Sound Exchange and/or the other players may take next in the wake of this CRB decision.

A Berklee-trained musician and former radio broadcaster, Barry is a member of EASL's Executive Committee, and he Co-Chairs the Section's Television & Radio Committee. A former co-chair of the NY chapter of the Federal Communications Bar Association (whose members practice before the FCC in Washington DC), Barry's practice focuses on communications, entertainment and technology. (bskidelsky@mindspring.com or 212-832-4800)

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