2014 Sound Exchange Information
US Copyright laws give music producers, artists, and song writers the right to charge fees for the performance of their works. The US Congress has formalized some of these rights in the Digital Millennium Copyright Act and subsequent actions, related to the broadcasting of music and other copyrighted works on the Internet. The Copyright Office has endowed the RIAA (Recording Industry Association of America) with the formal authority to collect fees on behalf of its membership. The RIAA has established a business unit named “SoundExchange” for this purpose.
In addition to RIAA/SoundExchange, there are three other organizations that represent members of this trade and charge performance fees. They are ASCAP, BMI, and SESAC.
There has been a great deal of confusion in the industry related to the rates structure and fees charged by these organizations. To aid your understanding, we have created the following overview. You can go to the web sites of each of these organizations to determine your precise obligation by using their on-line calculation tools or downloadable spreadsheets. Those are the tools that we used in determining the following calculations.
- RIAA/SoundExchange: $500 per year per station or channel
- ASCAP: $288/year (for non-commercial broadcasters)
- BMI: $320/year (for non-commercial broadcasters)
- SESAC: $232/year
- TOTAL: Approximately $1340 annually, or $112/month, for one station or channel
SoundExchange (RIAA) Basic Rates per Performance
Sound Exchange and NAB reached an agreement on February 15, 2009. A commercial broadcaster that is already webcasting can operate under the new rates
by electing to do so as per instructions on the Sound Exchange website.
(To get the form, go to the Sound Exchange website and click How Do I Pay? under
Digital Music Service Provider. This option is also available to broadcasters who are new to webcasting.
These are the new rates:
|2009||$0.0015 per performance|
|2010||$0.0016 per performance|
|2011||$0.0017 per performance|
|2012||$0.0020 per performance|
|2013||$0.0022 per performance|
|2014||$0.0023 per performance|
|2015||$0.0025 per performance|
For more details on Pricing and Options for both terrestrial radio stations as well as Internet-only webcasters, please take a look at our Sound Exchange page.
- For talk/news/sports/business: No liability if music is incidental.
- Other rates apply to Not-For-Profit, Educational, and Subscription services.
Greater of (web revenue * .0185) or (sessions * .0006). Sessions are max 1 hour, so a listener on for two hours counts as two sessions. Web revenue relates to advertising or similar earnings from music-related web pages. The ratio of hours to sessions is variable, but in our experience 20,000 hours/month typically generates about 44,000 “sessions” (discounting sessions <5 min due to station flipping). Usage exceeding their minimum is about $16,000 web revenue or 600,000 sessions/year (equivalent to about 20,000 hours/month). Special rates for talk programs.
Lesser of music impressions * .60 or page hits * .40. Usage exceeding their minimum is $12,000 web revenue or about 200,000 page hits/month.
SESAC Semi-Annual License Fees for 2012
Internet only broadcasters and non commercial terrestrial stations must calculate the two following figures:
- The 2012 Revenue Multiplier is .0057 and they pay the greater of that and the Semi-Annual Fee of $225.
The broadcaster then pays the greater of either the two calculated figures or the semi annual minimum fee of $194.
For terrestrial radio stations, there is a web site addendum that must be completed. The fee is based on the Metro Survey Area as determined by Arbitron and their high one minute spot rate. If the broadcaster is not in an Arbitron designated Metro Survey Area, the US Census population for the county in which the FCC City of License is located will be used in conjunction with the high one minute spot rate.
The minimum annual license fee for All-Talk Web Sites shall be as follows: 2012: $348.00; 2013: $420.00
- RIAA and ASCAP annual minimums are paid upfront on signup, non-refundable, and not pro-rated. If you start streaming December 1st, you must pay the same annul minimum just for that one month.
- BMI minimum is paid quarterly in advance, but is pro-rated so if you start December 1st, you only pay 1/12th of the annual minimum.
- ASCAP rates are based on listening “sessions”, similar to RIAA rates.
- BMI and SESAC rates are based on web page hits for web sites that make music available – the rate is not based on listener hours or sessions.
- ASCAP and BMI charge for the greater of sessions/hits and web-based revenue. Both have formulas to calculate your obligation based on the revenue generated by your music web site.
- SESAC rates are based on the greater of two calculations (revenue generated by the web site and ATH), or the annual minimum fee of $194.
- RIAA requires a full census report log every month, to include artist, title, album, and number of performances of each song.
- BMI blanket licenses require a usage report for one week per year with the same information as is required for terrestrial broadcasts.
- ASCAP’s contract permits them to ask for logs, but they don’t normally do so.
- SESAC has a simple, web-based form with no supporting reports.
The SurferNETWORK.com Digital Rights Page is intended for informational purposes only. SurferNETWORK provides software for generating Sound Exchange reporting requirements. SurferNETWORK does not offer legal advice to broadcasters seeking license and royalty compliance.