Streaming Broadcasters Relieved By Royalty Break
Radio broadcasters who stream online will pay about one-third less in music royalties to SoundExchange starting in January, thanks to new rates issued by the Copyright Royalty Board (CRB) late Wednesday.
The new rate for commercial nonsubscription services, both broadcast and pureplay, in 2016 is $0.0017 per performance. That’s a substantial reduction from the $.0025 that most broadcast streamers had been paying but a 21% increase from the $.0014 that pureplay webcasters have been shelling out. Setting the same streaming rate for pureplays and broadcasters marks a new meet-in-the-middle rationalization in the market.
The new rate for commercial subscription services in 2016 is $0.0022 per performance, down from $0.0025.
Unlike the previous rate-setting, there is no annual step up in royalties. However, the CRB has, for the first time, built in a cost-of-living provision for the period 2017 through 2020 that will adjust the rate annually to reflect any increases or decreases in the Consumer Price Index. But there’s no so-called percentage override, which would have replaced the per-performance rate with a percentage of revenue payment when a webcaster reached a certain revenue threshold. “That’s one of the things that SoundExchange had asked for and broadcasters in particular had said would be very difficult to administer,” attorney David Oxenford tells Inside Radio.
The rate for noncommercial webcasters is $500 annually for each station or channel for all webcast transmissions totaling not more than 159,140 Aggregate Tuning Hours (ATH) in a month, for each year in the rate term. But should a non-comm channel exceed that number, the webcaster will pay the same $0.0017 per-performance rate as commercial broadcasters.
“It sounds like the Copyright Royalty judges have settled on $0.0017 as the right ‘price’ in all circumstances except for those involving commercial subscription streaming services,” attorney Scott Flick tells Inside Radio. “It therefore sounds like they implicitly reached the conclusion that broadcasters have been overpaying for streaming rights in the past.”