The Copyright Royalty Board (CRB) released its 115-page decision earlier this week (March 6) setting performance royalty rates for streaming sound recordings over the Internet.

The rates apply to non-interactive webcasts and simulcasts by services that
choose to use the compulsory license (section 114 of the Copyright Act) rather than negotiate directly with copyright owners and performers for the right to perform sound recordings. The rates are effective retroactively to Jan. 1, 2006, and cover the period through Dec. 31, 2010.

For commercial webcasts and simulcasts (i.e., over-the-air AM or FM broadcasts simultaneously retransmitted over the Internet), the penny-rate must be paid per performance (i.e., per stream). The rates are $.00008 for 2006; $.0011 for 2007; $.0014 for 2008; $.0018 for 2009; and $.0019 for 2010. There is a non-refundable minimum fee of $500 per station or channel, which is recoupable from royalties due.

For noncommercial webcasts and simulcasts, the rate is a flat-fee annual payment of $500 per station or channel. If the noncommercial service exceeds
159,140 aggregate tuning hours (ATH) of programming per month, then the service must pay, in addition to the flat-fee, for additional performances during that month the same per-performance rates that commercial services pay.

The ATH is the total hours of programming transmitted to all listeners during a certain time period. Twenty simultaneous listeners during one hour equal 20 ATH. There are 730 hours per month (365 days multiplied by 24 hours per day, divided by 12 months per year). So a station with 20 ATH of programming equals 14,600 ATH of programming per month (20 simultaneous listeners multiplied by 730 hours).

The CRB placed the cap at 159,140 ATH per month based on a survey of the average number of simultaneous streaming listeners of National Public Radio stations in 2004. The average number was 218 listeners, which equals 159,140
ATH per month.

SoundExchange is the sole collective to administer these compulsory licenses. After its administration expenses, the non-profit organization distributes 50% of the royalties to sound recording copyright owners (typically labels), 45% to featured recording artists, 2.5% to AFM background musicians and 2.5% to AFTRA background vocalists. Payments to background musicians and vocalists are paid to an AFM/AFTRA trust set up to receive the royalties.