The uncertainty regarding the rates that commercial radio broadcasters will pay to play music in the repertory of SESAC, Inc. (SESAC) is over. Following extensive negotiations, the Radio Music License Committee (RMLC) and SESAC reached a new agreement extending the rates and terms of their existing music license agreement for commercial radio stations. That comes as welcome news for the radio industry, as the current rates were the result of a heavily litigated arbitration process and reflected a significant reduction of the rates that SESAC previously had demanded that radio broadcasters pay for its catalog.

The new agreement, which is retroactive to 2019 and expires in 2022, largely rolls forward the prior rates and terms for public performances of works in SESAC’s repertory that are made via radio broadcasting and “New Media Transmissions,” which include not only non-subscription transmissions over the Internet, wireless data networks, or similar means (such as simulcasting) but also:

(a)        “transmissions in response to a request by a listener or user for playback or replay of previously transmitted Radio Broadcasting programs or radio-style podcasts”; and

(b)        “ancillary, incidental audio-visual content displayed in conjunction with New Media Transmissions on or through [a] Station’s … primary website.”

The RMLC-SESAC license fee remains at 0.2557% of net revenue, and All-Talk stations, as defined in the agreement, will continue to pay a rate of 0.0575% of revenue. Stations also will continue to file Annual Reports, which will be due by April 1 of the year following the year for which the report covers. Therefore, the 2020 Annual Report will be due on April 1, 2021.

Notwithstanding the inclusion of certain types of podcasts under the definition of New Media Transmissions, stations should proceed with caution before relying only on the SESAC license agreement when producing content such as podcasts. A SESAC license covers public performance rights, but including music in a podcast, which can be downloaded, played on demand, etc., may raise other copyright issues relating to reproductions and derivative works. Therefore, the delivery of podcasts may require other copyright licenses in addition to a public performance license from SESAC.

Stations that wish to continue paying under the RMLC-SESAC license agreement must file their 2019 Annual Report and sign the new license agreement by September 23, 2020. The rates and terms reflected in the RMLC-SESAC agreement represent the RMLC’s hard-fought efforts to reduce the fees demanded by SESAC to somewhat more competitive levels as a result of antitrust litigation filed against SESAC several years ago, which culminated in settlement and an arbitration process, where these rates were first set. Stations that do not opt in to the RMLC-SESAC license agreement may end up paying significantly higher license fees than those that the RMLC was able to obtain. Be aware, however, that the agreement between RMLC and SESAC allows the RMLC to charge stations an administrative fee.

Along with submitting the Annual Report, stations will need to sign the new agreement to adopt the new RMLC-SESAC license (instructions for adopting the new agreement are available on SESAC’s website).

Keep in mind that license agreements negotiated between the RMLC and both ASCAP and BMI will expire at the end of 2021. (Note: The National Religious Broadcasters Music License Committee negotiates separately with ASCAP and BMI.) Keep an eye on CommLawBlog for more information about how copyright issues impact your business.