- SoundExchange and Corporation for Public Broadcasting Settlement on Internet Radio Royalties for 2011-2015
- August 13, 2009
- Law Firm: Davis Wright Tremaine LLP - Washington Office
The Corporation for Public Broadcasting has entered into a settlement with SoundExchange extending their current agreement on Internet Radio royalties for "Public" radio stations through 2015. The previous deal, about which we wrote covered the period from 2006 to 2010. This new agreement picks up in 2011 and covers included stations through 2015. As in the previous deal, the new agreement has a payment by CPB to SoundExchange satisfying all royalties for all of the covered stations. This was the fourth agreement that was announced last week, although details of this deal had not previously been released. We have written about the other deals entered into under the Webcaster Settlement Act of 2009 ("WSA"), including the deals with Sirius XM and with other noncommercial webcasters.
This agreement covers stations affiliated with NPR, American Public Media, Public Radio International, and the Public Radio Exchange. CPB will pay to SoundExchange $2,400,000 in five yearly installments, covering up to 490 public radio stations in the first year, and up to 10 additional stations per year thereafter (up to 530 in 2015). The fee is also subject to adjustment if all of the covered stations exceed certain listening levels. Those levels, and the required true-up for performances in excess of the caps, are set out below. However, the CPB payments for excess performances are limited to a total of $480,000 over the 5 year period of the Agreement:
Year Music ATH Cap Per Performance Rate
2011 279,500,000 $0.00057
2012 280,897,500 $0.00067
2013 282,301,988 $0.00073
2014 283,713,497 $0.00077
2015 285,132,065 $0.00083
The agreement recites that these rates represent a payment computed on the basis of 1/3 of the rate agreed to in the NAB settlement with SoundExchange minus a discount for the ease of collection caused by the single payment from CPB. If the covered stations stream anywhere near the Music ATH caps set forth above, that discount would be significant. It is also interesting to note that the deal is, by its terms, not precedential in the upcoming CRB proceeding. So why this suggestion as to how it was computed was included in the agreement is not clear.
Individual stations have few obligations directly to SoundExchange under this agreement. It is NPR which makes the election to go forward with this deal, once the CPB Board has approved the deal. It appears that some stations which are major users of music (the top 30% of the users of music among the covered stations) have to provide information about the songs that they play for a majority of their web site performances. Otherwise, simply complying with the rules on streaming, such as the performance complement
and providing some information about songs the station played for limited periods of time each quarter, seem to be all that is required of affiliated stations.
For CPB affiliated stations, this settlement provides security through 2015 to allow them to build their Internet radio audiences. It certainly is a benefit of being a CPB station - some of the most successful streaming stations on the Internet.