OAB Attorney David Oxenford Summarizes the Current Global Music Rights (GMR) Situation
Background on the GMR/RMLC Issues
Wilkinson Barker Knauer LLP
Commercial radio broadcasters have been seeing numerous communications over the last week about Global Music Rights (GMR) and its seemingly contentious music royalty negotiations with the Radio Music License Committee (RMLC). Many stations are confused about this controversy and what it is all about. The 5 questions below will hopefully shed some light on these issues. Stations need to carefully consider their options, and seek advice where necessary, to determine what they will do by January 31 with respect to the interim license that GMR has offered to stations. The questions below hopefully provide some background on these issues.
1. What is GMR and why isn’t the music they represent covered by the other organizations like BMI, ASCAP, and SESAC?
GMR is a new performing rights organization. Like ASCAP, BMI and SESAC, they represent songwriters and collect royalties from music users for the public performance of these songwriter’s compositions. They will collect not just from radio – they have already reached out to business music services that provide the music played in retail stores, restaurants and other businesses and no doubt have or will license other companies that make music available to the public. Most songwriters represented by GMR used to be represented by ASCAP or BMI, but these songwriters have withdrawn from ASCAP and BMI and joined GMR. For radio, these withdrawals became effective on January 1 of this year, when the old license agreements between ASCAP and BMI and the commercial radio industry expired.
2. What does a station need to do in order to protect itself while negotiations are going on?
Because the penalties for playing a song without a license can be as much at $150,000 per play, stations either need to purge all GMR music from their stations or sign a license agreement with GMR. If you decide to purge their music from your stations, don’t forget about music that may appear in commercials or syndicated programming. Also remember that we are talking about the musical composition, not the recording of the song by any particular band or singer. Even the broadcast of a high school band playing a GMR song at half time of some football game, or the broadcast of a local middle school choral concert, could trigger the royalty obligation to GMR.
3. What does the “Interim License” through September mean?
The Radio Music License Committee (RMLC) is the group that represents most commercial radio broadcasters in music royalty negotiations with the various organizations that represent songwriters. They have been trying to reach a license agreement with GMR, but have not been able to reach one at rates that they consider to be an appropriate reflection of the airplay received by songs written by GMR songwriters. RMLC has actually sued GMR, arguing that GMR has violated the antitrust laws in the negotiation process, and asking that an arbitration process be set up to determine rates (and GMR has, seemingly in response, sued RMLC).
Since it was clear that no final agreement between RMLC and GMR could be reached by January 1, to avoid having stations that play GMR music being subject to lawsuits for copyright violations, GMR has offered an interim license that lasts for 9 months. Presumably, if in that time GMR and RMLC settle their disputes and arrive at a reasonable royalty rate, and that royalty rate is less than the interim rate, some credit for part of the sums paid under this interim rate could potentially be built into the new rates.
GMR has this week reached out to many station groups with specific proposals as to an interim rate. Commercial stations that did not receive information from GMR can reach out to them and ask for the rate information. GMR has given stations until January 31 to agree to that rate, sign the interim license agreement, and pay the first month’s royalties. If a station does not choose to sign the interim deal and has not negotiated its own royalty agreement, and if it continues to play music written by GMR artists, then it is potentially subject to a copyright infringement lawsuit.
4. Is this going to lead to more people making demands for payment for songs broadcast on the radio?
If GMR is a successful in collecting enough money to pay its songwriters more than writers receive from ASCAP and BMI, this could encourage other organizations to create similar licensing organizations. Some large publishing companies have already suggested that possibility, and there are certain other companies that specialize in maximizing royalties for songwriters that have the potential to do the same thing. However, starting a performing rights organization like ASCAP, BMI, and SESAC is not easily accomplished as it requires setting up infrastructure for collection, reporting, distribution and enforcement activities. It also requires waiting for existing contracts granting performance rights to expire. Thus, new organizations are not likely to pop up overnight.
5. Is this related at all to the radio streaming waiver with SONY that the NAB is urging stations to consider?
The GMR issues all involve the rights to perform the underlying words and music to a song, not the rights to perform a recording of that song as recorded by any particular band or singer. The recording by a particular performing artist is called a “sound recording” or “master recording.” Broadcasters do not pay for the over-the-air performance of sound recordings, but they do pay performance fees when those recordings are streamed. The Sony waiver involves the digital performance right to sound recordings, and some of the rules that apply under the license for those digital performances. It is unrelated to the GMR controversy.
For more detailed information about some of these issues, I have written a number of articles discussing music rights on my Blog, www.broadcastlawblog.com.
On the Interim license issued by GMR, see my article here: http://www.broadcastlawblog.com/2016/12/articles/gmr-and-rmlc-agree-to-interim-license-for-commercial-radio-stations-providing-9-months-to-reach-final-deal-for-public-performance-of-musical-compositions/
On the litigation between GMR and RMLC see my articles here http://www.broadcastlawblog.com/2016/11/articles/rmlc-files-antitrust-lawsuit-against-gmr-and-seeks-to-enjoin-new-music-license-fees-on-radio-stations/
and here: http://www.broadcastlawblog.com/2016/12/articles/gmr-sues-rmlc-claims-antitrust-violations-for-negotiating-royalties-on-behalf-of-the-radio-industry-what-are-the-implications/
On the Sony waiver, see my article here: http://www.broadcastlawblog.com/2016/10/articles/nab-announces-agreements-with-sony-and-warner-to-waive-performance-complement-and-other-statutory-requirements-for-broadcasters-who-stream-their-signals/
For more information about some of the other potential players in music licensing, see my article here: http://www.broadcastlawblog.com/2016/07/articles/socan-buys-audiam-the-consolidation-and-fragmentation-of-music-rights-what-does-it-mean-for-music-services/
For a general summary of many of the music issues that affect broadcasters, see my article here, and the presentation slides that are referenced in that article: http://www.broadcastlawblog.com/2016/08/articles/whats-up-with-music-rights-for-broadcasters-and-webcasters-a-presentation-on-pending-issues/
2017 Regulatory Calendar for Broadcasters
A note from our Washington friend, David Oxenford: At the beginning of each year, we publish our broadcaster’s calendar of important dates – setting out the many dates for which broadcasters should be on alert as this year progresses. The Broadcasters Calendar for 2017 is available here. The dates set out on the calendar include FCC filing deadlines and dates by which the FCC requires that certain documents be added to a station’s public file.
The date for the beginning of the lowest unit rate window for the November general election is on the calendar, but stations need to check locally for primary dates and for any special elections that may be held in their service areas. Also included are some copyright deadlines, including dates to make payments to SoundExchange for Internet streaming royalties.
While the dates on this calendar may change, and new ones may be added, this at least gives you a start in planning your regulatory obligations. And, remember, you should always talk to your own attorney to make sure what dates are important to you.
-- David Oxenford, Partner--Wilkinson Barker Knauer, LLC
Global Music Rights (GMR) Music Royalty Fees
Important information for Radio Managers! As you may know, Global Music
Rights (GMR) is a recently-formed Royalty Rights firm that
represents some very popular and current musical composers. They are now in
negotiations with the Radio Music Licensing Committee (RMLC) which is the
same industry wide group that represents us with ASCAP, BMI and
SESAC. This is a very significant issue and does require your
immediate attention. GMR and the RMLC have come to an interim
agreement which will cover your station for any GMR music that it plays starting
January 1, 2017 for nine months. During that time both parties
will endeavor to reach a long-term negotiated pricing structure for your royalty
fees to GMR. The interim fees may be adjusted retroactively, up or down,
depending on the outcome of the final agreement.
You have three options: (1) Sign the interim license with GMR and then abide with the negotiated fees to which RMLC and GMR have agreed, and the fees that they negotiate for the future. You must make this election prior to 1/31/2017 if you want to chose option #1, and pay the first month's fees before that date. You will have to contact GMR to find out what your interim fees will be. Or (2), not sign the interim agreement with GMR and run the risk that if you inadvertently play some of their licensed music, you could be liable for a potential fine of $150,000 per song. Or (3), sign your own agreement with GMR and not be a party to the RMLC/GMR negotiations.
Bob Carpenter Elected to OAB Hall of Fame
The OAB Board of Directors recently elected sportscaster Bob Carpenter into its Hall of Fame. Bob started his illustrious career as the play-by-play announcer for the Tulsa Oilers baseball team and later became the Sports Director at KTUL TV 8 and KRAV FM in Tulsa. Bob then took his talent to the national stage and for the past 34 years has been one of the very most respected Major League Baseball announcers. He is currently in his 12th year with the Washington Nationals. He started with a ten year run with the St. Louis Cardinals and also was with the Texas Rangers. Bob is such a respected scholar of baseball, that since 1984 he has written and sold thousands of copies of his book, “Scorebook,” which has become the industry standard for how to score a baseball game.
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