The Radio Music License Committee and SESAC yesterday announced an extension of the terms of the royalty agreement that is currently in place between the commercial radio industry and this performing rights organization. As we wrote here, the agreement under which radio broadcasters have been paying for the last three years was arrived at after an arbitration process following the settlement of an antitrust proceeding, and resulted in a dramatic reduction in the amount of the royalties paid to SESAC prior to that litigation. The antitrust settlement calls for arbitration every three years if RMLC and SESAC cannot voluntarily arrive at new royalties. The initial three-year period expired at the end of the 2018. The parties have been negotiating a deal that covers the period starting from January 1, 2019, and the new deal that they arrived at runs for four years through December 31, 2022. The new blanket agreement is available on the RMLC website here and with instructions from SESAC here. It principally carries forward the deal terms of the prior agreement.
Note that in many trade press reports there have been statements that the agreement covers the public performance of SESAC music, not just on over-the-air radio but also on the streams of broadcast stations and in other “new media transmissions.” These new media transmissions, under the terms of the agreement, also include “radio-style podcasts.” As we noted in connection with RMLC’s recent license agreement with BMI, these agreements cover the public performance rights in a podcast, but that is not the only music license that you need to use music in a podcast. As podcasts are downloadable and playable on-demand, and they involve the synchronization of music and speech into a unified recorded work, the rights under Copyright law to make reproductions and likely the right to make derivative works of these recordings need to be secured. These rights need to come directly from the copyright holders in both the musical composition (the words and music of a song) and the sound recording (that song as recorded by a particular band or singer). The public performance rights from ASCAP, BMI and SESAC are insufficient by themselves to give you the rights to use music in a podcast, which is why there are so few podcasts that make extensive use of major label recorded music.
With the agreement with SESAC, combined with the agreement earlier this year with BMI and one agreed to in late 2016 with ASCAP (see our article here), the commercial radio industry has agreements in place with the major performing rights organizations except for Global Music Rights (GMR). As we have written before, GMR and RMLC are locked in an antitrust lawsuit in California that likely will not be resolved by the trial court until at least next year – and may be on appeal for years after unless some settlement is reached. In the interim, the commercial radio industry continues to operate on interim licenses where stations are paying royalties set by GMR. Watch as that case progresses. And watch as the industry heads back to the negotiating table next year for the next round of licenses as the ASCAP and BMI agreements are set to expire at the end of 2021, with SESAC the next year.
Correction, 8/25/2020 2:30 PM: Just after I posted this article, it was pointed out to me that the new SESAC agreement is for 4 years – from January 2019 through December 2022 – not three years as was the previous license. So the references in this article to the expiration date of the new deal have been corrected.
Courtesy Broadcast Law Blog