Copyright Royalty Board Sets New Rates

The Copyright Royalty Board (CRB) judges today issued their written determination of royalty rates and terms to apply from January 1, 2016, through Dec. 31, 2020, to digital performance of sound recordings over the Internet by nonexempt, non-interactive transmission services (i.e., Pandora, iHeart Radio, and other internet radio destinations) and to the making of ephemeral recordings to facilitate those performances.

The newly announced rate for subscription services is $0.0022 per stream (currently $0.0025). Meanwhile, the rate for non-subscription services has been set at $0.0017 per stream (currently at $0.0014). Subscribers make up approximately 5 percent of Pandora’s 78 million users.

The rates will apply only for 2016. The rates during the following years, 2017 through 2020, will be adjusted to reflect the increases or decreases in the Consumer Price Index. The previous CRB rate was set in 2009.

The new rates are slightly in favor of creators, but substantially less than some hoped to achieve ($0.0025 per stream). Webcasters, however, proposed rates ranging from $0.0005 to $0.0011.

This decision affects performers and compensation of the sound recording, not songwriters/publishers. Additionally, the rates do not affect on-demand services (i.e., Spotify), which allow users to select songs they wish to hear. On-demand services negotiate rates directly to license music. However, internet radio services, which allow users to listen to pre-made “stations,” but do not allow them to select individual songs, use a statutory licensing system under federal copyright law, with rates determined by the CRB.

For the full ruling from the CRB, click here.