The NAB has announced agreements with Sony and Warner Music Groups to waive certain of the statutory requirements for broadcasters who stream their over-the-air signals on the Internet. The NAB had entered into similar agreements with all of the major labels and major independent labels back in 2009 (see our summary here). But those agreements expired at the end of 2015, giving rise to fears among some broadcasters that some standard broadcast programming could not be streamed on the Internet (see our article here about those concerns). These agreements, at least as to Sony and Warner, mitigate those fears. This article provides a summary of some of the most important aspects of the new waivers.

These waivers cover requirements set forth in the Copyright Act which broadcasters, especially those who stream, may have difficulty meeting. Generally, the waivers provide the following:

  • Relief from the statutory requirements as to “ephemeral copies” of sound recordings that require that such recordings can be kept for no longer than 6 months. If that rule was to be applied strictly, stations that make a copy of a sound recording in furtherance of their streaming (or for their over-the-air broadcasts), by for instance making a copy of a song so that it can be stored in their digital music storage systems, could keep those copies for only 6 months. After that time, the station would be required to delete any copy of a song and re-record it if they wanted to keep a copy in their music library for another six months.
  • The agreements waive the performance complement, which would otherwise limit a station that is streaming its signal from playing more than 2 songs from the same CD or album in a row, or playing more than 3 songs in a row from the same artist, or from playing more than 4 songs from the same artist (or from the same box set) in a 3-hour period. The waivers allow stations to exceed these limits, only if they continue to play music in a manner consistent with normal broadcast operations. However, even with the waiver, no station can play more than half an album consecutively.
  • The waivers allow stations to announce upcoming artists, only if they don’t announce the specific times that specific songs will be played.
  • The waivers allow some relief from the obligation that a broadcaster streaming their on-air programming on the Internet identify in text on their website or mobile app the name of the song that is playing, the artist who performs the song, and the album from which that song is taken. That relief is limited to circumstances where, from time to time, a station can’t easily provide such textual information.

The two waivers are different, with the Sony waiver including additional restrictions. In both agreements, stations who stream must pay their required royalties to SoundExchange and otherwise meet all restrictions imposed by the Copyright Act. Under the Sony deal, for stations with larger online audiences exceeding 80,000 Aggregate Tuning Hours per month, restrictions are placed on the station if it steams through an aggregator site (like TuneIn). A station using an aggregator with that size of a listening audience must “geo-fence” its audience – meaning that the audience can only be people with US IP addresses. A tuning hour is the equivalent of one person listening for one hour, e.g. two people listening for a half hour each, or 4 people listening for 15 minutes each, etc. 80,000 ATH is an audience of about 110 average listeners, 24 hours a day, 7 days a week. Also, no participant in the waiver can participate in any lawsuit alleging that stations are exempt from paying royalties for streams received only within 150 miles of the station (see our summary of one such case here).

A station with an audience of at least 80,000 ATH in any month must also, by August 1, 2017, have a “buy button” on their website or app that allows listeners to purchase the song that they are listening to from a recognized service like Amazon or iTunes. Stations can get an exemption from that requirement if they can demonstrate unusual circumstances.

The Sony waiver also requires that broadcasters register to take advantage of the deal, and the NAB is handling the registration for all stations – not just NAB members. The registration site is here. The deals are open to all broadcasters, not just NAB members. So even noncommercial stations can take advantage of these deals.

The NAB has not announced agreements with Universal Music, or with any association representing the major independent labels. Thus, if you are playing music from these other labels, none of the waivers apply. At this point, all the statutory obligations still apply. Watch for developments there, as the other labels may decide to negotiate waivers too so as to not give broadcasters an incentive to play less of their music.

There are other specific obligations in each deal to which broadcasters need to pay attention. Stations should carefully review the terms of these deals with their attorneys, and be alert for further developments. But this announcement is great news for broadcasters worried about the performance complement and the other issues covered by these waivers.