Dear NRBMLC Friends,
2019 was a quite a year, and we’ll start 2020 on a hopeful note.
Good news! Your committee will have an “official” presence at the NRB Convention in Nashville February 25 – 28. We’ll have two sessions: Key Developments in Music Licensing on Wednesday, 2/26 at 12:00pm and a Music Royalties Workshop on Wednesday, 2/26 at 1:30pm. If you are attending the convention, be sure to join us at Ryman C Exhibit Hall and spread the word to your radio colleagues!
Web V, the Copyright Royalty Board’s (CRB) webcaster (streaming) royalty proceeding in DC began in early 2019. Following attempts at direct negotiation with SoundExchange, the noncommercial NRBNMLC filed its Web V case in September. Commercial radio’s case was filed by NAB for this proceeding. NAB is represented in Web V by the law firm Latham and Watkins. From a cost standpoint, this is very good news!
The following Web V information is therefore largely intended for noncommercialstations represented by the NRBNMLC in several other matters. If you read our updates you will have heard most of it before.
You Committee’s past experience tells us that if we cannot reach a negotiated deal with SoundExchange, we must prepare for a trial slated for mid-2020. That will include engaging in pre-trial discovery, additional depositions, witness prep, preparation of cross-examination questions for SoundExchange witnesses, and a myriad of other details.
The NRBNMLC has one other option. Shortly after your committee filed its case, we presented our second proposal to SoundExchange. SoundExchange has already reached a negotiated deal with the two other large noncom radio groups – NPR and CBI. Our proposal includes aspects similar to both of these agreements. If the parties are able to reach an agreement, SoundExchange would be able to avoid litigating noncommercial issues altogether and lower its license administration costs.
We are hopeful, but if for some reason the NRBNMLC and SoundExchange don’t reach a negotiated agreement, we must immediately ramp up into trial preparations. This scenario played out in 2015 and we had to try our case short on notice and budget. The result is evident in your increased royalty rates.
A trial is expensive. If the money doesn’t come in, we will need to withdraw from participation. Such a withdrawal would leave a noncommercial vacuum that SoundExchange would be able to exploit. They could press the CRB to set high noncommercial rates unopposed for some 1,400 non-commercial radio stations that we represent. In fact, they have already asked the Judges to double the $500 annual minimum fee to $1,000 and to raise the usage rate for additional streaming from $0.0018 per performance to $0.0028 per performance. Worse yet, there is nothing stopping SoundExchange from increasing its noncommercial “ask” even above these levels. Simply put, the recording industry could persuade the CRB to raise rates so severely that some stations would actually be priced off the Internet.
Your participation is essential. To see this through, we need to raise an amount approaching $250,000. Assuming there are already 400 stations financially involved in supporting Web V, 1,000 stations are not. This means raising $250K breaks down to just $250 per station!
The “AM-FM Act”
Congress has introduced what is loosely termed a “performance tax bill” in each Congress dating back at least a dozen years. This 119th Congress is no exception. In late November, Congressman Jerrold Nadler and Senator Marcia Blackburn introduced in their respective chambers the “Ask Musicians for Music Act of 2019” (“The AM-FM Act”).
Anticipating this would happen, the National Association of Broadcasters (NAB) encouraged two representatives and two senators to introduce the “Local Radio Freedom Act” in their respective chambers — HCR-20 in the House and SCR-5 in the Senate. These are opposition resolutions to the AM-FM Act.
Please contact your local members of Congress about signing on to one of these two resolutions. You can go to www.congress.gov to see if your respective Members have signed on yet. If not, write them a letter or drop in for a brief meeting. We have materials that will help you explain in writing or in a personal meeting.
We ask you to consider donating, or upping your existing contribution to this Committee. Do not stand on the sidelines and wait for the CRB to set rates at SoundExchange’s bidding. That will certainly happen if your committee cannot fund this fight. Doing nothing could mean no digital future for some stations.
Please send the pledge form found here with your contribution and let us know you are in this fight! Donations can also now be made easily online through this link.
Scott R. Hunter