New Increased Inflation Adjusted Royalty Rates for Webcasting

Webcasting royalties have gone up. The Copyright Royalty Board has announced new rates and administrative terms for digital performances of online sound recordings by nonexempt, non-interactive transmission services, such as Pandora, SiriusXM, and iHeartRadio.

What Are Royalties?

Copyright laws protect the creative rights of songwriters, authors, composers, and other creative professionals. The music industry relies heavily on royalties as payment for their artists—songwriters and performing artists.

Royalties are payments made by streaming platforms and the like to musicians or writers in exchange for the right to use their intellectual property.

A specialized lawyer, who is experienced in handling legal issues in the music industry, can help you gain insights into license requirements, copyright laws, and all kinds of royalties, including webcasting royalties.

Our experienced music lawyers at Chase Lawyers can ensure you get fair treatment and protection for all your creative endeavors in the music industry. We can help you determine unlawful broadcastings of your copyrighted works and demand proper compensation from all responsible parties.

What Is the Copyright Royalty Board?

The US Copyright Royalty Board is a three-judge panel, consisting of Chief Judge Feder, Judge Ruwe, and Judge Strickler. These Copyright Royalty Judges are in charge of overseeing and adjusting royalty rates and terms for statutory licenses as provided by the US Copyright Royalty and Reform Act of 2004.

Simply put, they determine the rates that musical performances receive whenever their works are streamed via digital platforms.

The Librarian of Congress appoints the three Copyright Royalty Judges. To be eligible for the position, a judge must have a minimum of seven years of legal experience. One judge must have comprehensive knowledge of copyright law, while the other must have extensive knowledge of economics. A third judge must have at least five years of judicial or quasi-judicial experience.

Copyright Royalty Judges serve six-year terms. They may be reappointed after the end of their term. 

What Are the New Rates for Webcasting Royalties?

CRB has issued new music royalty rates for webcasting, with both ad-backed and subscription services seeing increases.

Take note that the rates for commercial and non-commercial webcasting are subject to change. They will be adjusted accordingly based on the cost of living as determined by the Consumer Price Index.

Commercial Webcasters

Starting from January 1, 2021 to December 31, 2025, ad-supported non-subscription services will cost $0.0021 per performance. This is up from the $0.0018 rate last year. The rate for commercial subscription services has increased as well. It will be $0.0026, which is up from $0.0024.

Since the CRB delayed issuing the new rates, webcasters have some retroactive payments. Prior to the announcement, SoundExchange informed commercial, as well as non-commercial webcasters, to follow the 2020 rates. The rates are retroactive to January 1.

The rates would have been announced toward the end of 2020. However, due to the pandemic, the trial for determining the rates was postponed, which forced CRB to delay issuing the rates.

Non-Commercial Webcasters

Non-commercial webcasters, which are either owned by government entities or tax-exempt services, have to pay an annual $1,000 fee for every channel or station they use for webcast transmissions. They are subjected to the same royalty rates. However, they are given up to 159,140 aggregate tuning hours (ATH) per month.

These non-commercial entities will pay the $0.00021 webcasting royalty fee once they exceed their monthly ATH. 

What Is a Performance?

As mentioned, streaming services have to pay fees per performance. That means webcasting royalties are owed every time “a song recording is performed to a listener” via a streaming platform, says the CRB.

Let’s say 1,000 people tuned in to the new Ed Sheeran song. Webcasters owe 1,000 performances worth of royalties for that song. 

Who Are Affected by the New Rates?

Non-interactive streaming services like Pandora, SiriusXM, and iHeartRadio, where listeners can’t select, skip, or replay songs, are affected by the new rates.

Interactive streaming services like Spotify, on the other hand, which allow listeners to select the songs they want to listen to, aren’t affected by the update.

When Should Licensees Pay Royalty Fees?

According to the CRB, licensees must pay royalty fees monthly. Payments must be submitted on or before the 45th day after the month of the eligible transmission. Missed payments may be fined 1.5 percent per month or the highest lawful rate.

The legalities surrounding music and streaming royalties can be overwhelming. At Chase Lawyers, we are well-versed and experienced in the music, film, and TV industries. We can ensure that you get proper compensation for all your copyrighted works from streaming services.

Get in touch with us for more information.