Streaming Royalties Reduced

The Librarian of Congress has reduced the rates suggested for music streaming royalties and adopted lower amounts than those originally recommended by a Copyright Arbitration Royalty Panel. The most significant difference between the CARP’s determination and the Librarian’s decision is that the Librarian has abandoned the CARP’s two-tiered rate structure of 0.14¢ per performance for “internet-only” transmissions and 0.07¢ for each retransmission of a performance in an AM/FM radio broadcast, and has decided that the rate of 0.07¢ will apply to both types of transmission.
A controversial part of the CARP’s report was the use of a fixed, per-song/per-listener rate structure instead of the percentage of net-profit structure used for music licensing from composers and publishers. Librarian of Congress James Billington did not change that method of calculating copyright fees owed.
Billington leveled the playing field between terrestrial broadcasters and Internet-only Webcasters. The CARP had terrestrial broadcasters paying half the rate their Internet-only counterparts were to pay. Billington set the fee for both at the seven one-hundredths of a cent per-song/per listener.
Rates for non-commercial broadcasters were set at two one-hundredths of a cent per-song/per-listener for either simultaneous live or archive material Webcasts (for up to two side-channels), with a seven one-hundredths of a cent per-song/per-listener fee for all additional side-channels.
The fee Webcasters and broadcasters will pay for the making of ephemeral recordings has been reduced from 9% of the performance fees to 8.8%.
The Librarian’s announcement stated: “The Librarian is required to accept the CARP’s determination unless he concludes that the determination is arbitrary or contrary to the applicable provisions of the copyright law. When aspects of the CARP’s determination are found to be arbitrary or contrary to law, the Librarian may substitute his own judgment for that of the CARP, but he will still give deference to those aspects of the CARP’s determination which were not arbitrary or contrary to law.”
The Librarian noted he was required to accept the CARP’s determination that the Recording Industry of America Association’s licensing agreement with Yahoo! represented a willing buyer and seller negotiating an agreement in the marketplace. Internet radio operators had hoped the Librarian would find the RIAA/Yahoo! agreement not to represent a normal marketplace agreement.
The changes go into effect Sept. 1, however Webcasters would need to pay retroactive to Oct. 28, 1998. Full payment of pre-Sept. 1 licensed activities is due Oct. 20.