Webcaster Wake Up Call!

We usually publish our "Webcaster Wake Up Call!" post each January. This post reminds webcasting services of their compliance obligations for the upcoming year under the statutory licenses found in Sections 112 and 114 of the Copyright Act (the "statutory licenses") allowing them to publicly perform sound recordings via digital audio transmission. Part of the reason we usually wait until January is because the first of those obligations, the filing of an Annual Minimum Fee Statement of Account form and payment of $500 per webcasting channel, must occur on or before January 31 of each year (and the paper-based forms in question sometimes were not available until the beginning of the year).

Your 2019 alarm has gone off a bit early. Webcasters operating under the statutory licenses can begin online filing of Annual Minimum Fee Statement of Account forms and online payment of the $500 per channel minimum fee effective today (December 14, 2018). Those webcasters should have received an Email from SoundExchange on this subject that provides web links to (1) SoundExchange's "Licensee Direct" online filing portal and (2) SoundExchange's informational memoranda for Commercial Webcasters, Noncommercial Webcasters and Business Establishment Services (which, it bears reminding, are SoundExchange's interpretation of the regulations implementing the statutory licenses).

It is important to note that there are no changes from last year's filing requirements for Commercial Webcasters or Noncommercial Webcasters (including Noncommercial Educational Webcasters). So this next part will look very similar - almost identical - to the 2018 Webcaster Wake Up Call! post. Commercial Webcasters and Noncommercial Webcasters (again, this includes Noncommercial Educational Webcasters) must:

• File an Annual Minimum Fee Statement of Account form and pay the associated $500 per channel minimum fee. This must occur no later than January 31, 2019. Noncommercial Educational Webcasters who stream 80,000 or fewer monthly aggregate tuning hours may also pay a $100 per webcaster "proxy fee" with the Annual Minimum Fee if they want to be exempt from filing Reports of Use (this exemption must be claimed and the $100 proxy fee paid by the deadline - there are no do-overs).
• Pay any additional usage fees and file Monthly Statements of Account associated with those payments. This does not apply to everyone (in fact, Noncommercial Educational Webcasters do not have to do this at all because, by definition, they will not exceed the $500 annual minimum fee). For months where additional royalties and accompanying Monthly Statements of Account are required, they are due no later than 45 days after the end of the relevant month.
• File Reports of Use. Again, not every webcaster must file Reports of Use (we're looking at you, Noncommercial Educational Webcasters who pay the $100 proxy fee). But even some of the Commercial Webcasters, Noncommercial Webcasters, and Noncommercial Educational Webcasters who choose not to pay the proxy fee do not have to engage in "census" filing on a monthly basis if they do not owe additional royalties beyond the minimum fee. Instead, they may file "sample" reports on a quarterly basis for two weeks of that quarter. Reports of Use are due no later than 45 days after the end of the relevant month or quarter.

The "per performance" royalty rate applicable to Commercial Webcasters and to any "excess transmissions" by Noncommercial Webcasters (those occurring after the webcaster has exceeded 159,140 aggregate tuning hours in a given month) will also remain the same: $0.0018 per performance (as we have noted in the past, this equals 18 cents for every 100 people that hear a given song (or 18 cents for every 100 songs heard by one listener)).

As long as we're on the subject, a word on that royalty rate: the more things stay the same the more they're about to change. Another reason we're publishing this in December 2018 rather than January 2019 is that the next ratemaking proceeding will begin soon. Formally titled "Determination of Royalty Rates and Terms for Ephemeral Recording and Digital Performance of Sound Recordings" but colloquially known as "Web V," this proceeding will set rates and terms applicable to Commercial Webcasters or Noncommercial Webcasters during the years 2021-2026.

The Copyright Royalty Board will likely announce some key dates - including the date by which interested parties must file a Petition To Participate - in the coming days. Interested webcasters may wish to file a petition in order to preserve the right to participate (you can always drop out after filing a notice but cannot automatically jump in if the deadline has passed).

Typically (although not invariably), broadcasters (commercial and noncommercial) have not participated individually but have been represented in these webcasting proceedings by various trade associations and other organizations such as the National Association of Broadcasters, the National Religious Broadcasters Noncommercial Music License Committee, National Public Radio, College Broadcasters, Inc., and Intercollegiate Broadcasting System. If believe that you have useful information regarding the impact that the current rates, recordkeeping requirements, and other terms have on your business or you simply would like your voice to be heard in the upcoming proceeding but have limited resources to participate fully on your own behalf, you may wish to contact one of these groups.

If you aren't quite ready to file the Annual Minimum Fee Statement of Account form and pay your minimum fees (or haven't decided if you want to participate in Web V in some way), don't worry, you can hit snooze and wait to do this in the New Year. We'll be providing a follow up to this post before January 31.