A Webinar Presented by the Latino Public Radio Consortium

Presenters: Melodie Virtue, Garvey Schubert Barer Ileana Rivera Santa, Latino Public Radio Consortium Sally Kane, NFCB Ginny Z Berson, Justice & Community

Overview Music Copyright Basics Music Licensing Trick or Treat 3

Music Copyright Basics Owners have right to control how their work is used copy and reproduce distribute publicly perform make derivative works 4

Music Copyright Basics Types of Copyrights in Recorded Songs Musical Work notes and lyrics Sound Recording defined in the Copyright Act: “the fixation of a series of musical, spoken, or other sounds, but not including the sounds accompanying a motion picture or other audiovisual work, regardless of the nature of the material objects, such as disks, tapes, or other phonorecords, in which they are embodied” 5

Music Copyright Basics “Johnny Be Goode” Written Chuck Berry Re-recorded by Grateful Dead “In the Midnight Hour” Written by Steve Crocker/Wilson Pickett Re-recorded by Delbert McClinton, The Jam “Respect” Written by Otis Redding Re-recorded by Aretha Franklin 6

Music Licensing Each copyright owner has right to perform publicly and reproduce and distribute work Separate public performance copyright in underlying musical work and sound recording Musical Work public performance rights administered by ASCAP, BMI and SESAC Sound Recording public performance right administered by SoundExchange 7

Music Licensing ASCAP, BMI and SESAC collect royalties on behalf of owners of the musical work (notes and lyrics) usually music publishers each performing rights organization has different catalogs of musical works SoundExchange collects royalties on behalf of owner in the sound recording usually labels 8

Music Licensing For noncommercial broadcasters, the ASCAP/BMI/SESAC rates for musical works are set by the Copyright Royalty Judges. Current rates are set forth in 37 C.F.R. Section – available at: 9

Music Licensing Stations pay royalties for musical works based on population coverage and whether they have a music format or news/talk format 10

Music Licensing 11

Music Licensing For commercial broadcasters, industry groups negotiate with ASCAP and BMI for musical works. A consent decree requires that rate disputes be handled in federal district court in New York. SESAC is not bound by a consent decree and can set its own rates without oversight. 12

Music Licensing Sound recording copyright is limited to digital audio transmission Public performance right in sound recordings does NOT currently exist for over-the-air broadcasts by radio and TV stations 13

Music Licensing History Copyright Act did not offer any legal protection to sound recordings until 1971, when Congress enacted a law that granted exclusive rights to reproduce and distribute to sound recording copyright holders. Congress did not grant public performance right for sound recordings until passage of the Digital Performance Right in Sound Recordings Act of 1995, extended by the Digital Millennium Copyright Act in Thus, federal Copyright covers only sound recordings in existence since February

Statutory Licenses for Sound Recordings SoundExchange administers two statutory licenses Section 112 of the Copyright Act for “ephemeral” copies ‒temporary copies required for digital transmission ‒must be deleted in 6 months Section 114 of the Copyright Act for public performance of “digital audio transmissions” 15

Statutory Licenses for Sound Recordings The rates for Section 112 and 114 are bundled Service providers (webcasters) pay specific rate for Section 114 license SoundExchange apportions 5% of royalties to the Section 112 ephemeral copyright owner 16

Statutory Licenses for Sound Recordings The Negotiations and Rate Court: Rates can be negotiated by industry groups participating in the rate proceeding at the Copyright Royalty Board (“CRB”). If cannot reach agreement, CRB determines rates based on “willing seller and willing buyer” standard. Webcasters must timely elect one of the agreements or be subject to default rates and terms. A webcaster can also negotiate a direct license with each copyright owner which is exempt from the statutory license administered by SoundExchange. 17

Statutory Licenses for Sound Recordings Conditions on eligibility for the statutory license: Noninteractive (no on-demand streams or downloads) Commercially released (doesn’t cover bootlegs) No prior announcements of songs Identify artist, song title and album simultaneously with transmission Need to include metadata if technically feasible Accommodate technical protection measures Meet Sound Recording Performance Complement 18

Statutory Licenses for Sound Recordings Sound recording performance complement means: During a three hour period, Play no more than three songs from a particular album; Play no more than two songs consecutively from a particular album; Play no more than four songs by a particular artist; Play no more than four songs from a boxed set; and Play no more than three songs consecutively from a boxed set. 19

Statutory Licenses for Sound Recordings Conditions for eligibility (cont’d) File Notice of Use of Sound Recording Under Statutory License with Copyright Office in DC ‒$40 filing fee File Notice of Election with SX within 45 days of end of month in which streaming started, and by 1/31 each year File Statements of Account with SX File Reports of Use with SX Or elect CPB coverage 20

Statutory Licenses for Sound Recordings Public Radio – CPB deal with SX $480,000 paid by CPB for “covered entities” which are: NPR American Public Media Public Radio International Public Radio 500 originating Public Radio stations named by CPB ‒CSG grantees and NFCB member stations 21

CPB-Covered Stations NPR Digital Services prepares, gathers and coordinates SoundExchange compliant royalty reporting for entities covered under the CPB and SoundExchange agreement Must register on CPB site to be covered Must submit quarterly Reports of Use to NPR Digital Services NFCB collects reporting fees charged by NPR Digital Services 22

CPB-Covered Stations Costs of participating in CPB-SX deal Pay no annual fee to SoundExchange Non-NPR affiliated NFCB member pays $275 per year to NPR Digital Services, which includes $25 administrative fee to NFCB Covers all streamed channels 23

Non-CPB Noncommercial Webcasters All of the non-CPB Noncommercial deals require: $500 minimum annual fee paid to SoundExchange Minimum Fee Statement of Account filed by end of January and election of rates and terms Covers 159,140 ATH per month – listeners 24/7, 523 listeners 10 hrs. per day ‒ATH = Aggregate Tuning Hours – # of hours transmitted times # of listeners Pay additional royalties per performance if exceed 159,140 ATH per month ‒A “performance” is a single sound recording transmitted to each listener 24

Non-CPB Educational Webcasters Excess usage for educational broadcasters: Applicable only to webcasters operated by accredited educational institutions and staffed mostly by enrolled students & not CPB-qualified It will $240 extra per year for each additional 24/7 listener if exceed 159,140 ATH p/mon. CRB default rate: $ per performance (same as commercial rate) File Monthly Statement of Account only for month in which excess usage fees owed ‒due 45 days after the close of the month to which it pertains 25

Non-CPB Noncommercial Webcasters Excess Usage for noncommercial broadcasters (not educational institutions, and not CPB covered) Noncommercial Webcaster (Webcaster Settlement Act) (WSA) – $ per performance Excess usage royalties are much lower than other deals – marginal extra 12/7 listener will $81 per year Must file Monthly Statement of Account even if no excess usage royalties owed ‒due 45 days after the close of the month to which it pertains 26

Reports of Use Enables SoundExchange to distribute royalties to artists and labels After payment of SX administrative fees and ephemeral license to copyright owner (5%), royalties are distributed: 50% to sound recording copyright owner (usually label) 45% to featured artist 5% to AFM/SAG-AFTRA Intellectual Property Rights Fund for non-featured artists 27

Reports of Use Contents: Featured Artist ‒Mozart is not a featured artist Sound Recording Title Album Name and Marketing Label, or ISRC (International Standard Recording Code) Number of Performances, or ATH per channel and play frequency (# of spins) 28

Reports of Use CPB-covered stations – follow file format specified by NPR Digital Services Top 30% of CPB covered stations file based on full census Remaining 70% file 2-week survey each quarter Submit reports to NPR Digital Services Deadline usually within a week after the close of the quarter Must pay extra $500 if report not properly formatted 29

Reports of Use Non-CPB covered stations Use SX template applicable to the rates and terms elected, available at: provider/reporting-requirements/ provider/reporting-requirements/ Minimum fee broadcaster – report two 7-days periods each quarter Non-minimum fee broadcaster (exceeds 159,140 ATH) – report full census 30

Reports of Use Non-CPB covered stations (continued) Due within 45 days of the close of the month or quarter depending on deal selected 1.5% late fee imposed on late Reports of Use or late excess usage Statements of Account 31

Reports of Use Exemptions for micro-casters ‒Pay extra $100 “proxy fee” per year Educational Webcaster - eligibility is ≤ 55,000 ATH per channel per month listeners per hour) Noncommercial Microcaster (WSA) – eligibility is ≤ 44,000 ATH annually listeners per hour) Must elect by January 31 st each year! Otherwise, not eligible for reporting exemption 32

Trick or Treat Definition of Performance “Performance” means “each instance in which any portion of a sound recording is publicly performed to a Listener” but excludes: public domain (e.g., pre-1923, Creative Commons) direct license; and 33

Trick or Treat Definition of “performance” (continued), excludes: an incidental performance that both: ‒makes no more than incidental use of the music (e.g., “brief musical transitions in or out of commercials or program segments, brief performances during news, talk or sports programming, brief background performances during disk jockey announcements, brief performances during commercials of sixty seconds or less in duration, or brief performances during sporting or other public events”), and ‒“other than ambient music that is background at a public event, does not contain an entire sound recording and does not feature a particular sound recording of more than thirty seconds” (e.g., theme song). 34

Trick or Treat Pre-February 15, 1972 Sound Recordings not covered by federal copyright state law protection Flo & Eddie (the Turtles) litigation 35

Trick or Treat Verstandig case Copyright Act Section 114(d)(1)(B)(i) provides that simultaneous retransmissions are exempt within “a radius of 150 miles from the site of the radio broadcast transmitter” New technology through geo-fencing can restrict receipt of transmissions at 150 miles from transmitter. Verstandig Broadcasting filed suit in Harrisonburg, Virginia for a declaratory ruling that it is not an infringement of copyright if it limits its streaming to within 150 miles of its transmitter. SoundExchange claims that exemption is applicable to cable and translators re-transmitting live broadcast signals, not to web streaming. 36

Trick or Treat SoundExchange deals expire in 2015 CBI announced it reached a new deal for student stations for Must be approved by CRB and published in Federal Register Rates stay the same Exemption from reporting would go up from 55,000 total listening hours per month via the Internet to 80,000 total listening hours (increased 77 listeners p/hr.) 37

Trick or Treat CPB negotiations with SX Intended to continue with same terms Would have included NFCB members But SX concerned about precedential aspects on other negotiations Deal is now off NPR filed case with CRB 38

Trick or Treat Using cloud or other services such as Pandora, iPhones, Spotify to program a broadcast What your PRO and SX licenses cover ‒Over the air public performance license of non-dramatic musical works ‒Streamed public performance of non-dramatic musical works and sound recordings ‒Cover any legal copy of the sound recordings ‒Dramatic works not covered – need direct license 39

Trick or Treat Terms of Service for Pandora, Rdio, Spotify ‒Specifically license personal non-commercial use unless consent provided ‒DJ using their music library or subscription may be violating the terms of service Rdio and Pandora prevent broadcast because those services are not licensed to authorize other businesses to make public performances 40

Trick or Treat Spotify allows entities to set up Brand Accounts Must obtain all necessary licenses (PROs and SX) A Spotify “Brand Playlist” “must consist of at least 20 songs and may not include more than one track by a single artist or band” Be sure to review Terms of Service for any music service before allowing a DJ to broadcast from that service 41

Trick or Treat YouTube content is no different from grabbing anything else from the web The statutory license does not cover bootlegs Fair use for news and commentary critiquing the work so long as you use no more than necessary for the audience to recognize the piece 42

Trick or Treat What if you use video/audio from a live performance of an artist at a club? Station is not "transmitting/playing" the actual sound recording owned by the label because it's a recording of a live performance recorded by the station or on someone’s i- Phone The person shooting the video would own the copyright to that sound recording 43

Trick or Treat What if you use video/audio from a live performance of an artist at a club? (continued) Did the Person shooting the video and putting it on YouTube get a mechanical license from the owner of the musical composition (from the songwriters or their music publisher) to record the song or get permission from the performing artist to record the live performance? If not, it’s not a legal copy with a direct license or a commercially released copy covered by statutory license 44

Trick or Treat Archived programming Programs are posted on a website for listeners to hear repeatedly, on demand, in the same order ‒May not be less than five hours in duration ‒May not reside on the website for more than two weeks 45

Trick or Treat Looped or continuous programs Programs performed continuously so that the program automatically starts over when it is finished ‒May not be less than three hours in duration Merely changing one or two songs does not meet this condition Nor can programs be taken off for a short period of time and then be made available again 46

Trick or Treat Repeat of other programs limited Programs that are retransmitted at publicly- announced times in advance can be repeated only if: ‒Limited to three times in a two-week period for programs under one hour in duration ‒Limited to four times in a two-week period for programs over one hour 47

Trick or Treat Podcasts or Reproduction of CDs No statutory or blanket license available Must obtain direct license from all copyright owners ‒Musical Composition: Reproduction and Distribution o Mechanical license at fixed statutory rate o Current rates are set forth in 37 C.F.R. Section 381.7, available at: o Fees NPR pays cover NPR affiliates for that show 48

Trick or Treat Podcasts/Making CDs (cont’d) ‒Sound Recording: Reproduction and Distribution o Master Use license o Direct license o Label/owner is not required to grant and can charge what it wants Get release from Host 49

Trick or Treat Copying music Copyright Act allows copying in limited circumstances – limited exception for a sound recording included in educational radio programs distributed by NCE stations, so long as not commercially distributed to the public 50

Trick or Treat Copyright Act allows Public broadcasting entities to reproduce and distribute programs containing musical works solely for the purpose of allowing other NCE broadcast stations to broadcast the programs Must be destroyed within 7 days 51

Trick or Treat Copyright Act allows NCE station to make one copy of a transmission program that includes a musical work – For station’s own purposes within service area – Destroyed within 6 months unless preserved solely for archival purposes 52

Trick or Treat Copying - recap Need direct licenses to – Make back-ups of promotional CDs – Burn songs from iTunes to put on CD – Convert analog to digital backup copies – Create CDs to give away as premiums during fund drives 53

Anchorage Beijing New York Portland Seattle Washington, D.C. Questions Melodie Virtue ext Garvey Schubert Barer 1000 Potomac Street, N.W. 5 th Floor Washington, DC This presentation contains information necessarily of a general nature that cannot be regarded as legal advice. The firm will be pleased to provide additional details and to discuss matters contained in this presentation as they may apply in specific situations.