Digital Rights
Compliance
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 Millenium 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.
Approximate Pricing
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.
Annual Minimums
- 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
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 signing up at the Sound Exchange website by April 2, 2009.
(To get the form, go to the Sound Exchange website and on the left side click
"Download Forms". Choose "for Digital Music Services" and the form you need appears at the top.) This option is also available to broadcasters who are new to webcasting.
These are the new rates:
| 2009 | $0.0015 per ATH |
| 2010 | $0.0016 per ATH |
| 2011 | $0.0017 per ATH |
| 2012 | $0.0020 per ATH |
These are the rates used if you do not choose to operate under the new rates.
| 2009 | $0.0018 per ATH |
| 2010 | $0.0019 per ATH |
- For talk/news/sports/business: No liability if music is incidental.
- Other rates apply to Not-For-Profit, Educational, and Subscription services.
ASCAP
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.
BMI
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 2009
| Total Number of Components Offered on Licensed Web Site |
Multiplier | Minimum Semi-Annual Fee |
| 1 | .000666 | $116 |
| 2 | .001013 | $145 |
| 3 | .001563 | $180 |
| 4 | .002026 | $221 |
| 5 or 6 | .002304 | $267 |
Notes:
- 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, 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 only on ATH, no revenue calculation.
Reporting requirements:
- RIAA requires a usage report log of two weeks every quarter, to include artist, title, album, and number of performances of each song.
- BMI requires quarterly reports similar to RIAA usage reports, but wants the report to cover the entire quarter, rather than a sampling of data.
- 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.