Last week, noted Washington, D.C. attorney David Oxenford participated in a discussion about music royalties for broadcasters at the Texas Association of Broadcasters Annual Convention in Austin.
Joining Oxenford on the panel were the heads of the Radio Music License Committee and the TV Music Licensing Committee. These are the organizations that represent most commercial broadcasters in their negotiations with ASCAP, BMI and SESAC for public performance licenses for “musical works” or “musical compositions.”
“In our discussion, there was a general summary of the licenses needed for the use of music by broadcasters, a summary of the status of some of the current royalty negotiations, and questions about other issues in music licensing,” Oxenford notes. As this discussion raised a number of issues Oxenford has discussed and written about, he took a moment to highlight some of his past blog posts and columns, so that those interested in the topic can read up on this important subject.
TV: LESS ROYALTY ISSUES THAN FOR RADIO
“The TV industry seems to have far fewer issues than radio, perhaps because radio is so much more music-dependent,” Oxenford writes. “While there is music in many TV programs, some of it is cleared (i.e. licenses have been negotiated) by the program providers (including some networks), so that stations need only worry about licenses for programming where the music has not been pre-cleared. Thus, TV stations have alternatives of blanket licenses for all programming (principally used by affiliates of networks where music has not been pre-cleared) or per-program fees where stations pay for music only in programs or program segments where music has not been licensed by the program suppliers.”
The television industry has an agreement with SESAC that runs through the end of 2019. Negotiations are ongoing with ASCAP and BMI for new licenses, Oxenford notes—ASCAP’s license for commercial television expired at the end of 2016, and BMI’s license with commercial TV stations runs through the end of 2017.
Meanwhile, radio recently reached an agreement with ASCAP for a new license that runs through 2021. On SESAC, RMLC recently concluded an arbitration process that cut radio royalties more than 50% retroactive to the beginning of 2016 and running through the end of 2018.
“This year has been a busy one for RMLC, as not only have these processes been ongoing with ASCAP and SESAC, but a BMI license remains to be negotiated … or litigated in rate court,” Oxenford says.
Radio has also had to deal with a new performing rights organization, the Irving Azoff-backed Global Music Rights. GMR principally represents songwriters who have withdrawn from ASCAP and BMI.
Oxenford explains that RMLC has gone to court to seek to have an arbitration process, like that used with SESAC, imposed on GMR. “That action is being contested by GMR,” he says. “Until that litigation is resolved or settled, GMR has offered radio stations an interim license to play its music, recently extended through March 2018.”
ONLINE SIMULCAST ROYALTIES
Another issue discussed in Texas was the fact that even though these performance royalties cover the broadcast of a station’s simulcast programming on the Internet, they only cover the rights to the composition of a song – the words and music.
They do not cover the performance of a particular recording of that song.
In the U.S., there is no performance right in the recording of a song when played over the air by a broadcaster. But, there is a sound recording performance royalty when a radio station streams its signal on the Internet. Thus, a station that is streaming must also pay SoundExchange for this performance right to the sound recording.
“I am still surprised by how many calls I get from broadcasters who are streaming their signals and ask if SoundExchange really is owed money even though the broadcaster is paying ASCAP, BMI, and SESAC — and in many cases GMR as well,” Oxenford says.
Then, there is the topic of what these royalties do not cover.
“These royalties cover only the public performance of music,” Oxenford notes. “They do not cover ‘synch’ or ‘master use’ rights to take recordings or songs and put them into some fixed form with other content such as spoken words or video footage. Thus, using music in podcasts is not covered by the licenses from ASCAP, BMI, SESAC, GMR or SoundExchange.”
Similarly, there are issues in using recorded music (or even musical compositions) in pre-recorded broadcast advertising.
“Even though broadcasters have paid for the performance of music, when radio or TV programs are played in front of an audience of people who are not friends and family, a venue such as a store or restaurant will usually need its own public performance license,” Oxenford notes.
Music licensing is a complex subject. Thus, Oxenford asks that all stations discuss the specifics of their licensing needs with someone who really understands these issues.
He says, “When you are using music, make sure that you do your homework to avoid the issues that can otherwise arise.”
David Oxenford is a partner at the law firm of Wilkinson Barker Knauer LLP, practicing out of its Washington, DC office. He has represented broadcasters for more than 30 years on a wide array of matters from the negotiation and structuring of station purchase and sale agreements to regulatory matters. His regulatory expertise includes all areas of broadcast law, including the FCC’s multiple ownership limitations, the political broadcasting rules, EEO policy, advertising issues, and other programming matters and FCC technical rules.