In previous editions of BE Radio, we've learned a bit about the Digital Performance Right in Sound Recordings Act of 1995 (DPRA)
and the Digital Millennium Copyright Act of 1998 (DMCA). They are a
mouthful, but thanks to these two new laws plus the results of a failed
court challenges in response to these new laws, we now have a roadmap
of the rights territory we'll be in with a digital future for terrestrial broadcasters as we try to be heard on the Web.
The new laws are pretty clear; digital content use is all about
content. If you own content, you can use it in existing and new
ways. If that content belongs to somebody else, you'll need to have
permission to do so — and pay for the privilege.
IBOC notwithstanding, the view of our digital future at the moment
is pretty much focused on the Internet. In short, to be on the Internet
you have to pay for:
the technical costs, including hardware, software and bandwidth;
original compositions and other authorship of creative works; and
the use of each specific performance by an artist/performer.
Old rights extended
There are two types of copyright for musical recordings. One is for
the composition, the other is for the actual recorded performance. Up
until the DMCA, broadcasters were exempt from paying royalties for
In the U.S., radio has long dealt with the copyright issues of
composers of music. Radio outlets that carry music have paid blanket
fees to licensing agencies like ASCAP and BMI for years. Stations have
been allowed to use compositions by paying the negotiated blanket
payments, plus the requirement of occasionally reporting playlists of
music when requested.
As an aside, recently some news/talk radio and TV outlets have
gotten out of the business of paying blanket fees, instead paying fees
on a per-program basis, but that's another story.
The short rule is that if you play a song, you pay the composer. The
new laws establish that new media (such as streaming webcasts)
is a new use. So, additional compensation is due to the composer
for the “extra” use.
As for costs, ASCAP and BMI have stated that their streaming
agreements are “experimental” in nature, because they are
not sure where the business model will land. For example, in 2001, the
BMI Annual Minimum Fees listed on their website (bmi.com) ranged from $200 to
When the Associated Press chose to exercise its copyright of written
content in a “new use” on the Internet in the summer of
2001, it caught many broadcasters unaware, and unhappy. Under the AP's
interpretation of the new laws as upheld by the courts, even reading AP
copy on the air — and then on the Internet — is a new
The major change for broadcasters who want to stream their live or
nearly live content is the addition of rights for performers. While
other countries have long had a performer royalty payment, it's a new
subject for U.S. broadcasters.
The Recording Industry Association of America (RIAA) has taken a
lead role in promoting additional fees to performers and producers as
well. The initial negotiations with RIAA seemed a bit bumpy, and the
fee structure that was first sought seemed outrageously high to many
broadcasters. The long-awaited report from the Copyright Arbitration
Royalty Panel was issued February 20. The rates are lower than the
RIAA's request, and they give broadcasters an advantage over
streaming-only services, but they are based on a price per song, per
individual listener - not a blanket fee. This first round of fees is
retroactive to usage from 1998 to 2000. Negotiations for other years
are underway. The report is subject to final approval by the Copyright
Office in May.
The American Federation of Television and Radio Artists (AFTRA) also
has a major stake in the new digital performance rights. Under the
AFTRA Radio Recorded Commercials Contract, radio performers are
entitled to 300 percent of the session rate for commercials recorded
for radio if they are also used on the Internet.
This is the major reason that a number of large-market stations that
rely heavily on AFTRA talent ceased streaming in 2001 until they could
find a simple way to block from being webcast those commercials that
were broadcast. A lower-cost agreement negotiated between broadcasters
and AFTRA may finally return the spots to the Web, but only time will
A major provision of the DMCA is the allowance of a Statutory
License to cover broad groups of parties — in our case, radio
stations and the record industry. A Statutory License Fee allows
stations to pay one group, such as the RIAA, to handle the royalty
payments. Otherwise, stations might have to negotiate with each
individual copyright holder — an onerous task. There are hopes
that a blanket royalty rate for the entire industry could be
The DMCA also allows for other negotiated agreements. RIAA, AFTRA
and others have also been working on licensing deals with streaming
providers — companies that some radio stations pay to host their
streaming. Similar negotiations directly with several major radio
groups were blocked by the Copyright Office in December 2001, but still
could gain approval.
Stations that are not yet streaming may want to consider paying the
$20 fee for a Statutory License with the Copyright Office of the
Library of Congress.
The digital future
Seek legal counsel to help you sort out a strategy for an online
presence as there is only one given for U.S. radio in the digital
world: everybody pays.
Commercial and non-commercial stations may have different measures
for how the rights organizations will determine a station's fair
share, but ultimately, anyone who wants to be on the Net will be
paying, one way or another.
In the long run, webcasting for broadcasters will end up being a
business decision — just like the rest of our efforts. Without a
good reason for the investment, there is nothing to sustain. If several
thousand dollars a year (or tens of thousands) in technical and rights
costs is beyond a station's reasonable investment, then the plans for
worldwide reach must be placed on the back burner.
As a mark to level the terrestrial radio's competition from other
forms of media: if everyone pays, so will satellite and Web-only
Hanley is director and general manager of WDUQ-FM, Pittsburgh,