Performance Royalty Update

Posted on September 17, 2007 by Mike Clark

Here’s an update on the status of performance royalties and licensing of the music that I play on stations in the Christmas Music 24/7 network. Sound Exchange offered me (and a handful of other small commercial webcasters) a contract that would allow me to pay the old rates for the music that I play. The catch is that the contract only covers the labels that have agreed to allow Sound Exchange to represent them. Sound Exchange sent me the list of labels, and it amounted to over 7,000 different label names. I compared that with the music I play, and discovered about half of the music I play comes from labels that are not covered. Almost all of the non-covered music is from smaller, independent labels; although a handful are from labels that have gone out of business.

For any music that I play that is not from a Sound Exchange member label, I have to pay the high, Copyright Royalty Board (CRB) rate, based on a “per-performance basis.” Per performance is for every time I play a song, I pay for each listener of that song. For example, if I played all of the songs from a CD in the 2006 Christmas season, I will owe approximately $125 for that CD. That money is sent to Sound Exchange, where they keep 5% for their overhead; then the remainder is divided between the label and the artist. If Sound Exchange can’t find the label or artist, Sound Exchange gets to keep the money they have collected.

The labels that have gone out of business I have to pay the high CRB rates for the privilege of sharing the music, even though Sound Exchange probably won’t find anyone to send the money to.

If you are an independent artist, you have three options:

  1. Do nothing, I end up paying a lot of money for playing your music from January 2006 through September 2007, and I probably shut down my stations at the end of 2007. I have already removed most independent labels from my playlists. You get no more promotion from Christmas Music 24/7.
  2. Give me written permission to play your music without paying the high performance royalty tax. This is called a direct license. I have a short form that you fill out, and then return to me. Once I have your signed form, I will play your music on as many of my stations as I can to give you the greatest amount of exposure i can.
  3. Become a member of Sound Exchange, and allow them to negotiate on your behalf. This would put your music under the umbrella and I do not have to pay any extra money for playing your music. You will receive a small amount of money from the Internet radio stations that play your stations, and that money will continue on into the future.

I would greatly prefer that independent artists take the second or third option. If you’d like to take the second option (“direct license”) all you need to do is download the direct license form [PDF – requires Acrobat], and mail it back to me. Email me that you’ve signed the form, and I’ll add your music back to my playlists immediately. I’ll also link to your website, as well as attempt to make it as easy as possible for people to find out about you and your music.

If you have any questions or concerns about this, please let me know.

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