The mystery of the fourth SoundExchange settlement agreement has been solved.
As we reported last week, SoundExchange announced that it had entered into four agreements establishing webcasting royalty rates. The terms of three of those agreements were described in our blog last week, but SoundExchange withheld details about the fourth . . . until now. As it turns out, the fourth agreement is with the Corporation for Public Broadcasting (CPB), and it extends through 2015 (with some tweaks) the terms of the SoundExchange/CPB agreement reached months ago.
Under the original deal, which covered the years 2006-2010, the nearly 500 eligible stations make their royalty payments to NPR Interactive, which then makes a $1.85 million lump sum payment to SoundExchange on behalf of the participating stations. To be eligible, a station must:
- Be licensed by the FCC;
- Originate programming (that is, it can’t be solely a repeater station);
- Be either (a) a member or affiliate of NPR, American Public Media, Public Radio International, Public Radio Exchange, the National Federation of Community Broadcasters or (b) a public radio station that is qualified to receive funding from CPB;
- Qualify as a “noncommercial broadcaster” under the statutory licensing rules; and
- Webcast as part of the mission that entitles the owner to be exempt from taxation under Section 501 of the Internal Revenue Code, or, if it is owned by a government entity, operate for a public purpose.
The new deal extends the original deal an extra five years – through 2015 – which provides certainty about future royalty rates for participating stations. (Adopting an end-date of 2015 also brings the CPB deal into conformity with other SoundExchange royalty agreements.) In 2011 there will be another lump sum payment – this time to the tune of $2.4 million (although that may increase based on increased listenership at the covered stations). Most stations will continue to enjoy the more relaxed requirement pertaining to the reporting of information about songs played (two seven-day periods per quarter), although more music-oriented stations will get stuck with census reporting.
Again, CPB is providing the lump sum payment, so eligible stations need to keep an eye out for more information from CPB or NPR which should be arriving in the near future.