Webcaster Wake-Up Call! SoundExchange Reports and Payments Due Soon

Same as it ever was: as they start in on the next five-year period with new rates and terms announced in Webcasting IV, webcasters must again attend to annual SoundExchange homework.

It's been a month since I wrote about Webcasting IV, the decision of the Copyright Royalty Board that set webcasting rates and terms for the next five years. We still haven't actually seen the CRB's full decision, so there still might be some nuances to the ruling that weren't previously apparent in the initial announcement of rates/terms. And even without those nuances, we've seen some controversy surrounding the ruling from many camps.

SoundExchange (along with the record labels and artists for whom it collects royalties from those engaged in streaming) isn't happy that the royalty rates didn't increase by very much. It's presumably even less happy that in some instances (like the rates for commercial broadcasters and certain subscription services) the rates decreased. Meanwhile, small, online-only webcasters were shut out entirely and pay full freight. Even small broadcasters felt a bit of a pinch, losing their exemption from the requirement to file Playlist Reports of Use.

But as we wait for the full text of the CRB's ruling, argue about whether the CRB reached the right result, and plan next steps, one thing is certain. There is a deadline one week from today for all webcasters: the requirement to file an Annual Minimum Fee Statement of Account form and pay the annual minimum fee of $500 per channel by February 1, 2016. This applies to ALL webcasters, commercial and noncommercial. And, as always, the compliance obligations don't end there.

Here's a brief summary of what each classification of webcasters (there are now really only three that are relevant to our readership) must do this year, with a link to the SoundExchange page offering more information for that particular classification:

Commercial Webcasters (the classification which now includes both (a) broadcasters engaged in webcasting and (b) online-only webcasters):

By February 1, 2016: File an Annual Minimum Fee Statement of Account form and $500 per channel fee.

Monthly, within 45 days of the end of the month: (1) File a Monthly Statement of Account form identifying the number of performances you had in the given month; (2) pay any fees accrued at this year's per performance rate of $0.0017; and (3) submit a Report of Use identifying certain information about every song played during the month. (Webcasters who do not exceed the $500 annual minimum fee do get something of a break here: they can file "sample" reports on a quarterly basis, covering two separate seven day periods each quarter).

Non-Commercial Webcasters (This classification includes webcasters operated by (a) a government entity or (b) an entity exempt from federal income taxation under Section 501(c) of the Internal Revenue Code, but it does NOT include webcasters affiliated with an accredited educational institution and substantially staffed by students of that institution. Note also that certain special requirements apply to certain public radio entities):

By February 1, 2016: File an Annual Minimum Fee Statement of Account form and $500 per channel fee.

Monthly, within 45 days of the end of the month: File a separate Monthly Statement of Account form for each channel. You will not pay any fees unless you exceed an "aggregate tuning hour" threshold of 159,140 ATH in any month, in which case you will pay the excess at the same $0.0017 per performance rate applicable to commercial webcasters.

Quarterly, within 45 days of the end of the month: File a "sample" Report of Use covering two separate seven day periods during the quarter, unless you exceeded the 159,140 ATH threshold in 2015 or expect to do so in 2016, in which case you must revert to "census" filing of these reports - the filing of reports on a monthly basis covering all songs played during the month.

Non-Commercial Educational Webcasters (This classification includes webcasters which are operated by (a) a government entity or (b) an entity exempt from federal income taxation under Section 501(c) of the Internal Revenue Code, and which ARE affiliated with an accredited educational institution and substantially staffed by students of that institution):

By February 1, 2016: File an Annual Minimum Fee Statement of Account form and $500 per channel fee.

Monthly, within 45 days of the end of the month: File a separate Monthly Statement of Account form for each channel. However, you will not pay any fees unless you exceed an "aggregate tuning hour" threshold of 159,140 ATH in any month, in which case you will pay the excess at the same $0.0017 per performance rate applicable to commercial webcasters.

Quarterly, within 45 days of the end of the month: File a "sample" Report of Use covering two separate seven day periods during the quarter, unless (1) you averaged fewer than 80,000 ATH in every month of 2015 and expect to do so again in 2016, in which case you can pay a $100 "proxy fee" with your annual minimum fee in order to be completely exempt from this requirement or (2) you exceeded the 159,140 ATH threshold in 2015 or expect to do so in 2016, in which case you must revert to "census" filing of these reports - the filing of reports on a monthly basis covering all songs played during the month.

SoundExchange prefers that webcasters use their somewhat new "SoundExchange Licensee Direct" website that allows for submissions and payments online. They are more than willing to help you set that up and may answer other questions for you.

However, quite often they will tell you that they can't offer legal advice to webcasting services and will suggest that you consult an attorney - always good advice when uncertain of any legal requirements or obligations.