Things to know about the December 2015 ruling by the Copyright Royalty Board (CRB) on a new pricing structure for content licensing in the United States include.
1. Fee under the new structure will be collected by the SoundExchange.
Royalty fees are distributed by the SoundExchange as follows.
a. The Artist gets 45%.
b. The copyright owner gets 50%.
c. The musicians union funds AFM and SAG/AFTRA get 5%.
2. This new licensing scheme will be valid for 5 years.
The structure in question is reviewed every 5 years by law with the new ruling applying for the period of 2016 through to 2020. This is then it’s 4th review to date.
So far the SoundExchange has paid out over $3 Billion in copyright royalties to artists and copyright owners, $205 million of which alone in the third quarter of 2015.
4. A single use case, things are now a lot “simpler”.
Historically there were a number of use cases broadcasters could elect to fall under such as commercial, microcaster, pureplay or FM simulcaster, each with a different pricing structure. However this has all now been simplified down to two rates. One for so called non-subscription streaming priced at $0.0017 per track play and another for subscription streams priced at $0.0022 per track play.
5. Subscription services will pay more.
Although a middle ground compromise was negotiated between services such as Pandora and the SoundExchange through the CRB. The new rate is considerably higher than it was ($0.0014) for their use case.
6. Commercial radio companies will pay less.
Historically commercial radio stations paid $0.0025 per track play, the new rate therefore represents a big saving for them.
7. No more revenue percentage payments.
The old system allowed broadcasters to choose between a per track play fee or fee based on a percentage of their annual revenue. However the latter option will no longer be available.
8. Fewer reporting waivers.
Fewer broadcasters will be entitled to waive their reporting requirement to the SoundExchange. Going forward only those related to educational institutions will have that option.
9. Big Businesses will be unaffected.
The new ruling doesn’t apply to any of the bigger music streaming services such as Youtube, Spotify, Google or Apple all of which have made deals directly with license holders.