- Why did the royalty rates go up?
- Has this happened before?
- Who is impacted?
- Is this happening because the music industry is greedy?
- Do musicians really see money from internet radio royalties?
- Who made this website?
Sound recording performance royalties under the statutory license are set every five years by a panel of three federal judges called the Copyright Royalty Board (CRB). Their most recent ruling covers the years 2016-2020.
These rates can be supplemented by other agreements or legislative vehicles. The Webcaster Settlement Act created a special tier for small broadcasters to pay a percentage of their revenue rather than a per-performance rate. This act expired at the end of 2015.
Unfortunately, the CRB did not hear any evidence from small webcasters in the most recent ratesetting proceeding, so the unique needs of small webcasters were not able to be considered, nor were they reflected in the outcome.
Yes. The previous two proceedings saw negotiated rates for small webcasters using a different rate calculation than the big commercial broadcasters. This was later codified by the CRB as directed by Congress. So there’s both a precedent for solving the problem and a reason to be optimistic we can find a solution again.
Small commercial webcasters who once paid a percentage of their revenue rather than a per-performance rate are impacted, as well as aggregation services that hosted a number of small webcasts
Unaffected by the change are noncommercial webcasters affilliated with 501(c)(3) organizations, and anyone broadcasting in the old “microcaster” tier.
No. Although the industry is rife with stories of shady business practices and big companies standing in between artists and their royalties, the statutory license administered by SoundExchange means that artists and rightsholders are paid directly and simultaneously.
The National Association of Broadcasters, a lobby group representing big corporate radio has opposed the Webcaster Settlement Act in the past; we expect continued resistance, as the current rates are favorable to broadcasters who also operate digital platforms, but are potentially too expensive for smaller, standalone webcasters and new marketplace entrants. They don’t want the competition.
Furthermore, NAB opposes the Fair Play Fair Pay act which would compel AM/FM broadcasters to compensate performers and labels, like the rest of the developed world. It’s not fair for webcasters to have to compete against corporations who are earning record-breaking amounts of advertising dollars without having to pay a cent to those who brought the music to life.
The non-profit organization Soundexchange distributes sound recording royalties through a very simple formula. After deducting their low administrative costs, SoundExchange pays out digital performance royalties based on the following calculations:
45% – goes to the featured artist
50% – goes to the sound recording copyright owner (often a label, sometimes the artist)
5% – goes to a fund operated by musicians unions AFM and SAG/AFTRA for distribution to backing players, session musicians, and backing vocalists.
Payment to artists through SoundExchange is direct, and can’t be held against recoupable debt to a record label. It’s a rational, fair and transparent system that artists can have confidence in. And, with more than $3 billion paid out to date, it is also an important revenue stream forindependent music artists and labels.
By the way, recording artists and labels, if you haven’t signed up for Soundexchange, you really should do so! You may have already earned royalties that you don’t know about. It’s free and easy!
Radiodiversity.com was built by Future of Music Coalition, a national nonprofit research, education and advocacy organization for musicians and composers.