Meet the new year, same as the old year, as webcasting royalty regimen remains largely unchanged.

“Evergreen” stories – The kind of stories that recur regularly. Stories like “NFL reminds non-paying universe never to utter the words ‘super bowl’”.  You’ve seen them before.

And if you haven’t yet figured it out, you’re reading one right now.

Welcome to the annual reminder materials that have to be filed with SoundExchange under the statutory license applicable to the digital transmission of sound recordings. This applies to webcasters and streamers.

The fact that this is an evergreen, of course, doesn’t mean you should stop reading right now. Quite the contrary. An evergreen – well, at least this evergreen – comes back every year because it relates to stuff that merits attention every year. 

And the webcasting requirements are especially right for the over-and-over-and-over evergreen treatment because I know that, no matter how often I expound on the subject – here on CommLawBlog, at broadcast conferences, in e-mail outreach – there are broadcasters out there who still don’t get it. Maybe they’re unaware of the requirements, maybe they’re aware of but confused by them – or maybe they regard the requirements as something less than “real law”, despite the fact that those requirements have become more and more ingrained into the fabric of the radio industry with each passing year.

Whatever. My mission is to do what I can to lay out the annual SoundExchange filing requirements so that everybody that has to comply with them can know what to do. 

Let’s get to it.

This year my post will be more streamlined than in previous years. That’s because, for the first time in about five years, there is some semblance of stability in the webcasting world. In previous years we’ve had intervening court decisions, actions by the Copyright Royalty Board (CRB), proposed legislation, settlement agreements and other factors that contributed a sense that the system was constantly in flux. Not this year. The only substantive changes from last year are: (1) an increase in the royalty rate that is applied to each service category and (2) slight changes to the particular forms to reflect that increase. (And even the increase in royalty rate is no surprise – it’s just what was provided in the five-year plan adopted by the CRB in 2010.)

In addition, the SoundExchange website has really improved since I started these reminders, as has SoundExchange’s outreach to the industry. Most registered webcasters (those who have filed the Notice of Use of Sound Recording Under Statutory License form and made payments/filed Playlist Reports of Use in the past) have probably received a reminder from SoundExchange already. So it’s easier to get clear information about an already simplified process with which many radio stations are already pretty familiar. I’ve heard from a number of folks that SoundExchange’s responsiveness to individual inquiries has improved as well.

Another reason for this year’s more streamlined approach: we aren’t in the business of just giving it away. If you’re still not clear on the obligations, you’re reaching out to us – or another law firm – seeking to utilize our specialized expertise. We’re happy to help, but bear in mind that there may not be a one-size-fits-all solution available for your particular circumstances.  I, for one, would prefer to provide clients with individualized guidance to ensure that they are fully compliant and can remain that way with the minimum cost and effort.

With that behind us, the 2012 SoundExchange basics come down to a simple “who”, “what”, and “when” – as in, “who am I”, “what must I file” and “when do I have to file it by”.

Who: Any radio station almost certainly falls into one of three basic service categories: commercial, noncommercial (determined by the webcasters’ 501(c)(3) status, not its FCC-licensure) or noncommercial educational (a noncommercial webcaster affiliated with an educational institution whose operations are also substantially staffed by students). Within each service category, there are sub-categories for small broadcasters or microcasters that offer relief if the webcaster stays under a certain aggregate tuning hour threshold (27,777 ATH/yr for commercial broadcasters, 44,000 ATH/yr for noncommercial and 55,000 ATH/month for noncommercial educational). Note that some service categories and, especially, small broadcaster or microcaster sub-classifications may require you to also file a Notice of Election by January 31. (Failure to opt into service categories subject to this deadline could bar you from the category for the rest of the year.)

WhatRegardless of the category, each webcaster is required to make payments to SoundExchange. The amount due is tied to the royalty rate for the webcaster’s particular service category:

  • commercial broadcasters pay $0.0020 per performance;
  • noncommercial webcasters of all stripes get the first 159,140 ATH per month free and pay on a per performance basis after that (noncommercial webcasters following the CRB decision for 2011-2015 pay $0.0021 per performance; noncommercial webcasters opting into the general noncommercial webcasting settlement agreement pay $0.00067 per performance)
  • noncommercial educational pay $0.0020 per performance

Of course, all webcasters must also pay a $500.00 per station annual minimum fee.

Most stations must also file Playlist Reports of Use with SoundExchange, listing key information about every song played during the relevant reporting period. The self-classification process becomes especially important here, as noncommercial webcasters operating under the settlement agreements have relaxed reporting requirements, while small broadcasters and noncommercial and noncommercial educational microcasters may be able to pay a $100 “proxy fee” to be exempted from the Playlist Report of Use requirement entirely.

WhenNotices of Election, if applicable, and Annual Minimum Payment Statements of Account are due on January 31.Monthly Statements of Account are due every month thereafter, within 45 days of the end of the month to which they pertain (i.e., by March 16 for January, April 14 for February, etc.). These filings must occur, for most service categories, even if you do not have a payment to make for that month (whether because you didn’t reach the required noncommercial threshold or because your accumulated royalties haven’t exceeded $500.00 for the year to date). You must also file your Playlist Reports of Use on this same schedule (subject to certain relaxations for qualifying noncommercial webcasters who might only file quarterly or the small broadcasters or noncommercial/noncommercial educational microcasters who might not file at all). 

That’s the basic structure – same as last year. Clients of the firm should already have received a specialized e-mail as well that outlines the choices you must make and the factors that will influence your decision; our e-mail also provides links to the specific forms you will need. Otherwise, SoundExchange has accumulated all the information and link to the relevant form on one convenient page (Internet-only, non-FCC licensed webcasters will find their information here as well). You should feel free to contact us if you have further questions.