On Tuesday (11/27), the Copyright Royalty Board announced in the Federal Register that the sound recording royalty rates paid to SoundExchange will be increasing next year.
David Oxenford, an attorney at Wilkinson Barker Knauer who represents broadcasting and digital media companies in connection with regulatory, transactional and intellectual property issues, blogged on the topic today (11/28). Here’s what he has to say:
In December 2015, when the CRB set the current royalty rates that apply from January 1, 2016 through December 31, 2020, the CRB noted that the rates would increase based on increases in the Consumer Price Index. Last year, the Board determined that the CPI had not increased enough to merit an increase in the royalties. This year, based on the calculations set out in the Federal Register, there will in fact be an increase.
So, for all streaming in 2018, nonsubscription webcasters will pay a per performance royalty of $.0018 instead of this year’s $.0017. For subscription streams, the rate will increase to $.0023, an increase from $.0022 per performance rate. These rates apply to all noninteractive webcasters who pay the statutory royalty (see our article here for an explanation of the difference between noninteractive and interactive webcasters). Thus, the rate increase will include simulcasts of broadcasters’ over-the-air programming. Noncommercial webcasters who exceed 159,140 aggregate monthly tuning hours (for which they pay $500 per year) will also pay at the $.0018 rate for performances above the tuning hour limit.
Note that these rates apply through the end of 2020. As the CRB proceedings take two years to arrive at new rates, the Board will be starting a new proceeding to determine royalty rates for 2021 through the end of 2025 starting in January 2019.
It’s never too early to start thinking about the next proceeding now.