Annual Webcaster Wake-Up Call! Some Things DO Change on New Year's Day

Webcasters have until JANUARY 31 to file Statement of Account forms, pay annual fees to SoundExchange

According to famed lyrical poet Paul Hewson (“Bono” to his millions of friends), “nothing changes on New Year’s Day”. He reportedly started writing the song as a love paean to his wife, although it eventually morphed into a political statement inspired by the Polish Solidarity Movement. Regardless of the song’s broader political statement (or anybody’s personal notions about the significance of New Year’s Day), the plain statement isn’t true: things do change on New Year’s Day. 

Compliance with the statutory license applicable to webcasting is one of those things. 

When the ball drops in Times Square, webcasters are faced with updated forms to fill in and submit, a new cycle for reporting, and a clock ticking down the 31 days until the annual minimum fees of $500 per channel must be sent to SoundExchange. 

Thankfully, much like last year, the changes from 2012-2013 are pretty minor. The rates have increased slightly. The forms have changed a little (with a new look and feel), although that shouldn’t be anything to worry about if you’ve done this before. And, in perhaps the most noteworthy change, there are actually fewer forms for some webcasters to file. Here’s an overview of what will be expected of webcasters in 2013.

And when I refer to “webcasters”, I’m referring not only to my primary target audience, i.e., FCC- licensed radio stations who are webcasting. (See below for more details on the three different categories of broadcaster/webcaster). Beyond that radio-based universe is a larger universe of operators engaging in “non-interactive webcasting”, perhaps more commonly referred to as “streaming”. (These are folks who, in overly simplified terms, don’t allow the user to request and directly hear a song.) The information in this post is generally applicable to all webcasters, radio-based and non-radio-based alike. 

Radio stations who are streaming online (most often consisting of a simulcast of the station’s over-the-air signal, though perhaps offering one or more “side channels” as well) normally fall into one of three categories: commercial broadcaster, noncommercial webcaster, and noncommercial educational webcaster. Remember that the distinction between “commercial” and “noncommercial” is based not on the station’s FCC license, but rather on whether the entity offering the webcasting service is exempt from federal income taxation under Section 501(c) of the Internal Revenue Code. There is a further distinction between “noncommercial webcaster” and “noncommercial educational webcaster”, the latter being affiliated with an accredited educational institution whose students substantially staff the webcasting operations.

There are also sub-categories within each category. For instance, a noncommercial webcaster can self-classify under the “CRB” or “WSA” designations. “CRB” stations are subject to the rules put in place by the Copyright Royalty Board in its Webcasting III decision applicable to the years 2011-2015; “WSA” stations are subject to the relevant Webcaster Settlement Agreement. 

The designations of “commercial broadcaster”, “noncommercial webcaster (WSA)” and “noncommercial educational webcasters” include special categories for smaller entities which come with some benefits. By paying an extra $100 “proxy fee” with its annual minimum payment, a commercial broadcaster who had fewer than 27,777 “aggregate tuning hours” in the previous year and expects to do so again can receive an exemption from the rather onerous monthly “Playlist Report of Use” requirement. Ditto both for a noncommercial webcaster (WSA) who had fewer than 44,000 aggregate tuning hours in the previous year and expects to do so again, and for the noncommercial educational webcaster who had fewer than 55,000 aggregate tuning hours in every month (though you can go over in one month) and expects to do so again. 

You choose your category – or, if applicable, your status as a small broadcaster or microcaster – when you file your Annual Minimum Fee Statement of Account form with SoundExchange. That form is due by January 31, 2013. Note: in prior years, small broadcasters or microcasters had to file a separate “Notice of Election” form; this year that election is incorporated into the Annual Minimum Fee Statement of Account form, which includes a line where the webcaster will indicate its election to pay the $100 “proxy fee”. 

But that’s not all: your obligations continue throughout the year. With the exception of the noncommercial educational microcaster, everyone – whether payment is required or not – must file a Monthly Statement of Account form with SoundExchange within 45 days of the end of the month in question. Full-sized commercial broadcasters, noncommercial webcasters and noncommercial educational webcasters have to file Playlist Reports of Use on a regular basis – generally monthly – as well.

So consider yourself reminded: if you are engaged in “non-interactive webcasting”, you will need to find the proper Annual Minimum Fee Statement of Account Form and send it to SoundExchange along with your payment of $500.00 per channel by January 31, 2013. If you qualify either as a “small broadcaster” or under one of the “microcaster” categories, you may also pay an extra $100 per channel in exchange for an exemption from the requirement that you file Playlist Reports of Use on a monthly or quarterly basis (but you don’t need to use a separate Notice of Election form this year).  However – with one very minor exception for noncommercial microcasters – regardless of your classification or size, your obligations do NOT end on January 31, 2013. You will need to file Statement of Account forms and, possibly, Playlist Reports of Use throughout the year.   

You can get more detailed information about every category via the “How do I Pay” page on the SoundExchange website. We’re here to help as well.

[UPDATE:  This morning, after we had posted this piece, our friends at SoundExchange sent around a note advising webcasters of a new SoundExchange-produced video in which they “break down what your service needs to submit to be compliant with the statutory license for 2013”.  You can find that video at this link.  And, of course, webcasters can also get help from the SoundExchange Licensee Relations group at 202-559-0555.]

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