SoundExchange Royalties Explained

The US Copyright Office requires anyone that streams musical content on the Internet registers an Initial Notice of Use form and pay a $25 filing fee.  This notice serves as your intention to use the statutory license under sections 112(e) or 114(d)(2), or both, of title 17 of the United States Code, as amended by Public Law 104-39, 109 Stat. 336, and Public Law 105-304, 112 Stat.2860.

A radio station must then file a Notice of Election with Sound Exchange and pay their minimum fee.  Their fees are based on a per performance basis.  A performance is defined as one person listening to one song.  Each January 1, a minimum yearly fee of $500 is required to be submitted.  Then each month a report of the total number of performances and the associated monetary liability is to be submitted.  This fee is then deducted from the initial $500 payment.  A second monthly report is required.  This report is a report of use and identifies the artist, title, album cover, marketing label and IRSC number along with the number of performances for that month.  In 2009 the NAB negotiated a separate licensing agreement that provides a codicil for small market stations.  If you have 27,777 or less aggregate tuning hours for the previous year, you can pay a $100 proxy fee in lieu of doing full census reporting.  You are still required to submit the monthly statement of account with the number of performances.

If you have syndicated content you need to be able to report on that or it can’t be streamed.  You must be able to provide at the artist, title, album cover, marketing label and IRSC number for each piece of musical work performed in that month.  Your content provider should be able to provide that data to you.  Your streaming vendor should have a solution to address this, if not you can’t stream it.  I know there are some providers out there that take a stance of if it doesn’t come through the automation system it doesn’t get reported.  If you stream it and you don’t report it, you are leaving yourself open for potential legal action.

Disclaimer: The information is presented for informational purposes, you should consult with legal council or adviser for more detailed information.

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