This week the Copyright Royalty Board made its initial determination regarding the Phonorecords III proceeding, which spans from 2018 to 2022.
The document covers several aspects related to royalty payments for digital music services. It begins by defining different categories, including Eligible Interactive Streaming, Eligible Limited Downloads, Limited Offerings, Mixed Service Bundles, Bundled Subscription Offerings, Locker Services, and Other Delivery Configurations.
It then proceeds to outline the scope of these categories that focuses on royalty rates and calculations, explaining how these rates are determined based on revenue and expenses associated with each offering.
Additionally, it introduces royalty floors, which establish minimum royalty amounts for specific types of offerings. These floors ensure that a guaranteed baseline royalty is provided. The calculation process involves determining the all-in royalty, subtracting performance royalties, determining the payable royalty pool, and allocating royalties to individual musical works.
For a subscription service where you can only stream music on a non-portable device with an internet connection, the minimum royalty payment per subscriber is 15 cents per month. This applies to the period from January 1, 2018, to December 31, 2022.
If the subscription service allows you to listen to both streamed and downloaded music on a non-portable device, the minimum royalty payment per subscriber is 30 cents per month.
For a subscription service that lets you listen to streamed and downloaded music on a portable device, the minimum royalty payment per subscriber is 50 cents per month.
In the case of a bundled subscription service offering multiple services, the minimum royalty payment is 25 cents per month for each active subscriber.
This five-year-long process has defined various categories and outlines the calculation of royalty rates based on revenue and expenses. The introduction of royalty floors ensures a minimum baseline royalty for specific types of offerings, providing fair compensation to
creators. The minimum rates set clear standards for subscription services across different device and content configurations. This goes a long way in establishing a foundation forequitable compensation and paves the way for a sustainable future in the music industry.
So, is Lucien Grainge happy now? I would guess not.