SoundExchange Appeals New Rates

Look for the group to lay out the basis of its grievances with the court later this summer
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SoundExchange had expressed disappointment with the new webcasting rates set by the Copyright Royalty Board in December. Now the organization — which sits at the center of the royalty ecosystem, distributing payments to artists and copyright holders — is appealing the findings of the three-judge U.S. administrative body.

It’s not clear with which part of the CRB’s decision SoundExchange is unhappy. But, “Web IV proceedings do not reflect a fair market price for music and will erode the value of music in our economy. We are therefore moving forward with an appeal to the decision,” it said in a statement on its website.

SoundExchange is a nonprofit that collects and distributes royalties for artists and sound recording copyright owners for “non-interactive digital transmissions” including internet and satellite radio. (It also supports legislation to require AM/FM broadcasters to pay royalties to recording artists and record labels for over-the-air content.)

The new webcast rate for commercial broadcasters was seen as a win for the radio industry; CRB’s decision left most commercial radio broadcasters paying a rate of $0.0017 for online simulcasting this year or 17 cents per 100 songs played, down from a rate of 25 cents in 2015. Pandora also reacted generally positively to the rate ruling at the time, while the Future of Music Coalition reacted more cautiously.

Internet-only radio stations saw a 15% increase over the 2015 effective per-performance royalty rate. The new higher rate is in effect through 2020.

SoundExchange, which described the appeal process as “a lengthy, deliberate” one, is appealing the CRB’s findings to the Washington, D.C. Circuit Court of Appeals. That court had adjusted some rates in the previous webcasting proceeding, observers said. SoundExchange expects to file a detailed list of grievances with the court later this summer, according to a spokesperson.

“We are unwavering in our position that all creators deserve fair compensation each and every time their music is used on any platform. We look forward to making our arguments on behalf of artists and record labels to the D.C. Circuit,” according to SoundExchange.

The CRB rate ruling did set music streaming fees higher in the case of some small commercial webcasters. That new higher rate structure has been blamed for some small webcasters shutting down and at least partly contributed to the demise of the Internet hosting platform Live365, observers have told RW.

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