FCC Denies ASCAP's Challenge To Pandora's Acquisition Of FM Radio Station

In re Pandora Radio LLC, FCC 15-129 (FCC released Sep. 17, 2015).

The FCC denied ASCAP's motion for reconsideration of (1) the Media Bureau's decision granting the application to assign the license of KXMZ FM radio station in South Dakaota to Pandora; and (2) the Commission's declaratory ruling, which held that it would serve the public interest to permit a widely dispersed group of shareholders to hold aggreage foreign ownership in Pandora in excess of the 25% benchmark set out in Section 310(b)(5) of the Communications Act of 1934 (subject to certain conditions).  The FCC re-affirmed its finding that ASCAP lacked standing to challenge the license assignment.  ASCAP also claimed that the Bureau should have examined the rationale and motivation behind Pandora's transaction, specifically, Pandora's hope by acquiring the radio station to qualify for lower music license royalty rates.  The FCC found that "whatever the impact of its acquisition on such royalty rates may be, Pandora has undertaken to offer programming responsive to the interests of its local listeners, and ASCAP has failed to identify any substantial and matieral question about Pandora's ability to provide such service in the public interest."

Radio Station Not Liable On Claims Based On Number Of Podcast Downloads

Cmty. Music Ctrs. of Atlanta, LLC v. JW Broad., Inc., 2013 ILRC 2580, 2013 WL 4516739 (Ga. Ct. App. 2013).

Plaintiff advertised its music education services on defendant's radio station, but failed to pay.  The radio station sued for "open account", and the plaintiff counter-claimed for breach of contract and fraud.  The crux of plaintiff's claims was that the radio station misrepresented the exposure it would provide through podcast downloads.  According to plaintiff, the radio station failed to fulfill its promise that there would be “hundreds of thousands of downloads” of the program plaintiff sponsored and, as a result, plaintiff did not receive the advertising exposure it had bargained for.

The court found that the radio station was not liable on the breach of contract claim because the plaintiff failed to present any evidence to show that the radio station promised that there would be a certain number of future downloads of the program.  Instead, the radio station "promoted the program's national popularity by stating that it 'has received hundreds of thousands of downloads,' in other words, in the past".  The fraud claim similarly failed because the plaintiff sought, not a certain number of downloads, but, rather, to sponsor a radio show for a specific time period.  Any prediction regarding future download statistics would be conjecture, falling short of fraud.

Sound Recording Performance Royalty Proposed

House democrat Rep. Mel Watt (North Carolina) announced a plan to reintroduce legislation requiring radio stations to pay performance royalties for sound recordings (not just for compositions).  The last time the issue was proposed, in February 2009 (H.R. 848, the Performance Rights Act), the bill failed to pass the House.  The National Association of Broadcasters issued a statement strongly opposing a "new performance tax."

Spanish Radio Stations Hit With Copyright Suit By Puerto Rican Publisher And Performance Right Society

Latin American Music Co., Inc. v. Spanish Broadcasting System, Inc.. No. 13-cv-1526 (S.D.N.Y. filed March 7, 2013).

Plaintiffs are a Puerto Rican publisher and a performing rights society (ACEMLA) alleging that the owners of several Spanish-language terrestrial radio stations (with websites that simultaneously stream the stations' content over the internet) are playing Plaintiffs' songs over the radio/web without a license.  An injunction is sought.

AM/FM Performance Royalties Discussed In Congress

Tamlin H. Bason, "Hearing on Internet Royalties Veers Into Discussion of AM/FM Loophole" (BNA 17 ECLR 2096).

BNA reports on a House subcommittee that held a hearing on a bill that would lower the royalty rates paid by services that offer internet radio, but that many lawmakers seemed more interested in dealing with the larger loophole: that AM and FM radio stations do not pay performance royalties.

Aussie Court: No Extra Royalties From Radios Streaming On Web

Phonographic Performance Company of Australia Ltd v Commercial Radio Australia Limited

[Feb. 15, 2012] FCA 93.

The issue before the Australia Federal Court was whether the scope of the non-exclusive licence of the right to broadcast certain sound recordings granted by a copyright collection agency to radio stations included the right to play those recordings in radio programs transmitted by FM broadcast as a simulcast with transmission of the same program via the Internet.

Phonographic Performance Company of Australia Ltd (PPCA) is a copyright collecting society representing the interests of copyright owners and recording artists in relation to the broadcast, communication to the public and public performance of recorded music and music videos in Australia. It offers non-exclusive licences of the copyright in a large repertoire of commercially released sound recordings for particular purposes. Commercial Radio Australia Limited (formerly called “The Federation of Australian Radio Broadcasters Limited”) (CRA) is an incorporated industry body representing the interests of commercial radio broadcasters in Australia who make use of such sound recordings in their day-to-day commercial activities.

By an umbrella Licence Agreement between PPCA and CRA (the Industry Agreement), PPCA agreed to grant to each member of CRA a nonexclusive licence of “… the Broadcasting Right in the PPCA Sound Recordings” for a certain period. Some radio stations which are members of

CRA have streamed their radio programs on the Internet. This streaming service involves the

simultaneous transmission of radio programs using the broadcasting services bands and the

Internet. The content of the radio programs made available over the radio and via the Internet

is the same. PPCA contends that, as a result of the the interplay between certain provisions of the Australian broadcasting and copyright law, the licence which PPCA agreed to grant to members of CRA did not include the right to make available to the public PPCA Sound Recordings in radio programs delivered via the Internet at the same time as making those recordings available to the public by means of a radio broadcast. CRA argues, on the other hand, that the existing licence does include that right.

The Court held that the simulcast transmission of the same radio program via the FM waves and the Internet is also a “broadcast” within the current definition of that term in s 10(1) of the Copyright Act and, for that reason, is within the scope of the licence which PPCA agreed to grant to the members of CRA and which it did grant from time to time to members of CRA upon the terms and conditions set out in the Member Agreement. PPCA failed to make out its case.

Example Of "Public Performance" Complaint Against Radio Station

MPCA King Of Spades, et al. v. T.E.C. 2 Broadcasting, Inc. et al., Index No. 1:11-cv-0080-JPJ-PMS (W.D. Va. filed Oct. 24, 2011).

Plaintiffs are affiliates of SESAC, a performing rights society, and seek injunctive relief and damages for defendants' allegedly unauthorized public performances of plaintiffs' copyrighted musical compositions on defendants' owned and operated commercial radio station.

Senate Proposes Royalties for Broadcast Sound Recordings

A new bill has been introduced in the Senate that would require over-the-air radio broadcasters to pay royalties for performances of sound recordings. Radio already pays royalties to composers for the music they broadcast, but since the advent of radio, stations have not been required to pay royalties to the performing artists or record labels. The new bill would give sound recording copyright holders the right to control performances of their recordings, but would set up a compulsory license under which radio stations would be able to perform sound recordings pursuant to agreed-upon rates.

By Bruce G. Joseph and Matthew J. Astle, Wiley Rein LLP (2/20/09)

American Censorship

The Parents Television Council is warning parents and radio stations not to broadcast Britney Spears' "If U Seek Amy" because the organization believes it "would violate the broadcast indecency law" if aired between 6 a.m. and 10 p.m. [Billboard.]

Growing up listening to Howard Stern, OTCS can't help but wonder: if Britney Spears violates indecency laws, is it time to reexamine the scope (and purpose) of broadcast indeceny laws?

Barring Foreign FM Broadcasts in Europe

Sabrina Tavernise, "Azerbaijan Bars Foreigners From Use of Its FM Band", 1/6/09 New York Times (World).

Azerbaijan has begun to enforce a law that bans foreign companies from broadcasting on national frequencies, effectively closing its airwaves non-domestic radio broadcasters. Foreign companies are still permitted to broadcast on shortwaves, satellite and cable. “They can broadcast any way they like, except for on our national FM frequency,” said an official in Azerbaijan’s presidential administration.

Radio Royalties in the Future?

House Subcommittee Approves Performance Rigths Bill:
The Performance Rights Act, bill HR 4789, would remove a historical exemption that allows over-the-air radio stations to avoid paying royalties to record labels and artists for performances of sound recordings

White Stripes Sampling Suit

The White Stripes are being sued in Candada by a form Quebec-radio DJ for alleged unauthorized sampling of (10 seconds of) her radio program. In addition to $70,000 in damages, the plaintiff is seeking the removal of all copies of the alleged infringing album, "De Stijl", from store-shelves.

If this was a case brought under the US Copyright Act, such remedy would be sought under 17 U.S.C. 503: "At any time while an action under this title is pending, the court may order the impounding, on such terms as it may deem reasonable, of all copies or phonorecords claimed to have been made...in violation of the copyright owner's exclusive rights..." Would a US court deem it REASONABLE to impound all copies of the White Stripes album, given the album is 37+ minutes in length, and the alleged unauthorized sampling is a mere 10 seconds (of a nearly 2 minute song)?

QTrax - What's Up With This?

In the early morning hour, our friends from blog Down By The Hipster sent OTCS this link, asking "whats up with this?"

Why, it's QTRAX, who on their website boast "free and legal music downloads". But, all is not as it seems over at this "authorized" P2P network. Rolling Stone reports that supposed deals between QTrax and the major labels has been "greatly exaggerated."

Nonetheless, QTrax represents the music industry's recognition that ad-supported, free, on-demand downloads are the next wave. The problem, though, is monetization. A distribution model like QTrax is similar to traditional radio: user's get their music for free in exchange for listening to advertisements. But unlike radio, a service like QTrax is on-demand and permanent. The incentive of having your song on the radio -- creating buzz and/or demand for listeners to purchasers to PURCHASE their own copy for later on-demand and permanent enjoyment -- is simply not present.

Perhaps that is why the labels pulled out?

You turn me on, I'm a Radio...

OTCS is shocked by the following data reported by the New York Times:

Of the 10 songs that have notched the most plays in one week, 8 joined the list
in the last three years. And the oldest of the 10, Avril Lavigne’s “Complicated,” dates only to 2002.

Wowzer. In today's world, is it possible for radio to break new artists like, for example, WMMS (Cleveland) broke David Bowie to the USA? Or is radio just a means of promoting downloads, and thus forcing top 40 to listeners at the bequest of the labels? The problem is, this is a self-perpetuating cycle. Radio keeps playing the same songs over and over because people want to hear popular songs (remember Outkast's "Hey Ya"?!) - but the more radio plays the songs, the more listeners realize what a limited medium radio is as compared to their iPods and satellite stations. As radio loses listeners, they play songs that are "popular" to attract listeners back. And so it goes... (But see the following justification from a program director who played one song 78 times last week: That is not so much out of concern over digital competition as it is a desire to respond to listeners’ busy lives. For real?)

Of course, this commentary relates only to pop-radio - there are still plenty of college/indie stations that play what they want to play (see any CMJ magazine!).