SoundExchange and webcasters to come up with an agreement on royalty rates. Modifying
Section 114(f)(5), the WSA 2008 granted SoundExchange the authority to make settlements until
Feb. 15, 2009, and allowed any agreement reached to have terms in force until the end of 2016.
It also eliminated all mentions of “small webcaster,” replacing it with simply “webcaster,”
thereby allowing webcasters of any size to enter into negotiated agreements. The WSA 2008
further allowed the parties to agree that their alternative rates may be drawn on as precedent in
future rate-setting proceedings, and also made optional the requirements for what shall be
included in such agreements.^3193
In January 2009, the Corporation for Public Broadcasting and SoundExchange came to
an agreement establishing royalties to be paid on behalf of public radio systems for streaming
sound recordings on about 450 public radio web sites from 2005 through 2010. The agreement
provides SoundExchange with a single up-front payment of $1.85 million, along with
consolidated usage and playlist information to assist with the process of compensating individual
artists. Additionally, National Public Radio agreed to withdraw its appeal of a May 2007 CRB
rate decision.^3194 Several weeks later, in February, the National Association of Broadcasters also
reached an agreement with SoundExchange to lower the Internet broadcasting rates for
participating radio stations by about 16% in 2009 and 2010, with stations paying an annual fee of
$500 for each channel and a per-performance royalty rate of $0.0008 in 2006, increasing to
$0.0025 in 2015, with a ceiling of $50,000.^3195 A group of small webcasters, including Attention
Span Radio, Blogmusik, Born Again Radio, Music Justice, My Jazz Network, and Voice of
Country, also came to an agreement with SoundExchange that covered 2006 though 2015.
Under the agreement, transmissions cannot exceed 5 million tuning hours per month, and the
rates are calculated as either:
(1) the greater of 10% of the webcaster’s first gross revenue in excess of $250,000, or
12% of any annual gross revenue exceeding $250,000; or(2) 7% of the webcaster’s annual expenses. For transmissions exceeding 5 million tuning
hours per month, the rates are either those set by the CRB’s 2007 determination, or
whichever rates are then applicable under Sections 112(e) and 114.^3196The Webcaster Settlement Act of 2008 was amended in 2009 to extend the negotiation
period, and President Obama signed it into law on June 30, 2009. After two years of
negotiations, on July 7, 2009, SoundExchange and “pureplay” webcasters (businesses whose
primary form of business is streaming sound recordings under a government license) came to an
(^3193) “Congress Votes to Allow Webcasters To Negotiate Rates With Sound Exchange,” BNA’s Patent, Trademark &
Copyright Journal (Oct. 3, 2008) at 753.
(^3194) “Public Broadcasters Agree to Web Music Royalties” (Jan. 15, 2009), available as of Aug. 1, 2012 at
http://www.lexisnexis.com/community/copyright-
trademarklaw/blogs/newsheadlines/archive/2009/01/16/public-broadcasters-agree-to -web-music-royalties.aspx.
(^3195) Rachel Metz, “Agreement Reached on Internet Music Royalty Rates,” The Washington Post, Feb. 17, 2009; 74
Fed. Reg. 9293, 9300 (Mar. 3, 2009).
(^3196) 74 Fed. Reg. 9293 (Mar. 3, 2009).