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Public Radio Agreement with Sound Exchange Royalties for stations webcasting sound recordings

Q & A

1. CPB has just released a joint statement with SoundExchange announcing that an agreement has been reached on royalty payments and recordkeeping requirements for public radio stations that webcast sound recordings. Who is covered and what are the terms?

The agreement covers all CPB-supported stations, other noncommercial stations that are members or affiliates of National Public Radio, American Public Media, Public Radio International, Public Radio Exchange or the National Federation of Community Broadcasters, and NPR, APM, PRI, and PRX themselves. Transmissions of sound recordings over the internet by these entities are covered from January 1, 2005 through December 31, 2010, when this agreement expires.

The agreement between SoundExchange and CPB supplants the May 2007 decision of the Copyright Royalty Board and establishes flat rate reporting requirements that are appropriate to public radio’s non-commercial, public service status. A lump-sum payment from CPB to SoundExchange will fully satisfy the webcasting royalty obligations of all the entities above for the covered period.

The agreement also requires all covered entities to implement a comprehensive reporting system, which is discussed in more detail below.

Public radio stations and other entities currently streaming sound recordings may continue and, in fact, are encouraged to continue this important expression of our public service mission. Stations may offer a single stream or multiple streams, a decision determined by the station to meet the needs of its community and audience(s).

 

2. Why was this negotiated agreement necessary?

The May 2007 decision of the Copyright Royalty Board simply was inadequate in recognizing public radio’s unique non-for-profit status and its historic community, public service mission. Its requirements for station webcasting had punitive consequences for public radio entities that succeeded in their community mission by attracting large audiences, or that experimented with multiple side channels.

SoundExchange acknowledged these differences between commercial and noncommercial entities and moved forward with an agreement that enables public radio webcasters to continue to meet their public service and non-profit missions.

 

3. How is this agreement similar to and different from previous agreements that covered public radio entities?

First the similarities - This agreement preserves public radio’s community and public service mission and our status as independent, non-profit entities. CPB continues to be the source of royalty payments on behalf of covered public radio entities. And the CPB payment is made on behalf of all covered entities that choose to accept this agreement. Any covered entity that chooses to be covered by this agreement need not make any additional royalty payments during the entire term, so there are no back liabilities for anyone who elects to be covered by this agreement. CPB’s negotiating and payment role are important because it preserves the cohesive and system character of public radio.

Now the differences - This agreement is based upon payment for consumption. While a single payment covers the entire system for the entire duration of the agreement, the payment has been calculated based on listening to web streams for the system. Growth in audience to public radio’s web streams results in higher royalties. The agreement contains annual growth estimates, both in audiences and in the number of covered entities. This is important to us for two reasons: First, we can use audience growth as one metric of determining the value of our service. Secondly, paying more as more people use our music web streams means that more musicians will share in our success.

The concept of payment for consumption also underscores the importance of usage reporting. To ensure that public radio’s royalty costs are in line with actual use, those covered by this agreement must establish reliable reporting systems. These reporting systems will also be of great importance in making more accurate and certain payments to musicians.

One last point on reporting … during the negotiations, we learned that almost half of the labels whose sound recordings appear on our systems’ web streams are not members of SoundExchange. Without reporting across the entire system, we cannot be sure that these independent musicians and labels will receive the compensation to which they are entitled. Reporting strengthens the connections between our stations, their audiences and the musicians who appear on our web streams by making royalty payments a certainty for all musicians, SX members and non members’ labels.

 

4. What do stations have to do to become part of this agreement?

Any station that wants to take advantage of the license rights provided by this agreement must complete the registration process set forth at CPB’s music rights website. Even if your station has previously registered for music licensing on this site, you must register your station again to agree to comply with the terms of this particular agreement.

Stations that have previously registered for other CPB-funded music licenses may enter this secure website using existing passwords. If you have not previously registered, you will need to obtain a password in order to have access to the site as described on the website.

If this is the first time your station has registered for a license agreement, you will need to provide administrative information about your station and its website that will be provided to the SoundExchange as well as to the licensing entity of any other licensing agreement on the website under which your station elects to receive rights. After your password has been accepted, you will be able to review a copy of the SoundExchange agreement.

To gain the license rights provided by this agreement to be available to your station, you will need to indicate that your station agrees to the terms of the license by checking a box provided for that purpose. Once you have provided all of the necessary administrative information about your station and its website, and have checked the box indicating that your station agrees to the terms of the SoundExchange license agreement, your station will be covered by the license rights described in this agreement.

 

5. Do stations have any financial responsibilities to pay royalties directly to SoundExchange?

Stations and public radio entities that register with CPB under the agreement have no additional royalty payment responsibilities to SoundExchange. CPB’s payment meets all royalty payment obligations for all entities covered in the agreement.

 

6. What reporting obligations will stations have and will CPB provide assistance for stations that need help?

CPB has announced that it has contracted with “XXXX” to develop a reporting tool that meets the reporting requirements of the Agreement and that will be made available to everyone covered by the agreement. Stations are not required to use this device, but will need to have implemented a comprehensive reporting system by the end of this agreement, which is December 31, 2010.

 

7. I have concerns with this agreement and may not want to sign? Does my station have that option?

This agreement was negotiated on behalf of the public radio system and specifically designed to meet the needs of public radio webcasters. Acceptance of the agreement is, however, optional. Stations that decline to accept the agreement will be bound by the royalty payment and reporting requirements of the May 2007 Copyright Royalty Board decision. NPR will drop the appeal of the CRB decision as a condition of being covered by the agreement.

 

8. Are all featured artists who are streamed on our station’s website covered by this agreement and will they receive royalty payments? What if these featured artists are independents and not members of SoundExchange?

The terms of the Agreement apply to all featured artists, whether or not they are members of SoundExchange. SoundExchange has statutory obligations to make payments to all featured artists who appear on internet music streams .

 

9. The term "webcasting" is used frequently. Is "streaming" the only form of web-distribution of sound recordings covered by the agreement? What about downloads?

This Agreement covers only streaming of sound recordings. Downloads of individual songs or podcasts that contain copyrighted sound recordings are not covered by this Agreement.