Webcasting Royalties Proceeding for 2021 to 2025 Moving Forward at the Copyright Royalty Board

Every five years, the Copyright Royalty Board (CRB), an administrative body housed within the U.S. Copyright Office, sets the amount of royalties that digital music services, including terrestrial radio, must pay to record labels and artists when streaming songs.

The current royalties took effect in January 2016 and expire in December 2020. The process to set rates for 2021 to 2025 was to begin in March of this year. However, due to the onset of the COVID-19 pandemic, the proceeding, known as Web V, was delayed until August. Conducted remotely, the trial-like proceeding had music services, terrestrial radio, the record labels and SoundExchange - the entity to whom streaming royalties for sound recordings may be paid if utilizing a statutory license - presented witnesses and experts to buttress their positions on whether new rates should be set for music services or current ones maintained.

NAB's position in Web V is that streaming of terrestrial broadcasts online, known as simulcasting, should pay a rate of $0.08 per 100 songs streamed rather than the current rate of $0.18 per 100 songs streamed that terrestrial radio stations currently pay or the rate of $0.28 per 100 songs streamed proposed by SoundExchange in Web V for all non-subscription, advertising-supported webcasts, including simulcasts. NAB believes its request for a differentiated rate for simulcasts should be granted by the CRB judges because:

1. Simulcasts interfere less with record labels' other streams of revenue as they are the least interactive type of webcasting.
2. Radio is more promotional than other non-interactive webcasting services and therefore holds additional value for record labels. This is evidenced by the extent of radio's reach of 272 million listeners per week resulting in music discovery and the intensity of the competition by labels and artists to be played on radio; and
3. The value of non-music content in broadcast radio differentiates it from all other webcasters. Non-music content is the driver of radio stations' listenership and the means for radio stations to differentiate themselves from competing stations.

Closing arguments are scheduled to occur on November 19, after which the CRB judges will begin deliberations with an expected decision to come by April 15, 2021. Normally, the judges are statutorily required to make a decision on new rates by December 15, 2020 but due to delays caused by the pandemic, the Register of Copyrights extended the deadline to April. However, the new rates will be retroactive to January 1, 2021.