RMLC 375

When a major overhaul to music copyrights became law last autumn, the biggest immediate impact on radio was that songs recorded before Feb. 15, 1972 would no longer be exempt. That means oldies or classic rock stations playing songs that predate that cutoff are now required to pay royalties on those spins whenever those songs are streamed online. The law also included a provision that helped broadcasters avoid potential lawsuits to collect royalties under state laws on those records. But to secure that protection, a station must make sure to file the required paper work and make a one-time payment to SoundExchange.

For some stations, the window may have already closed. The initial form to take advantage of the offer was due last month. It required stations to acknowledge they played pre-72 records before the new law was enacted last October and agree to pay a $105 per station fee. In a reminder sent to broadcasters, the Radio Music License Committee says those fees must be paid by July 8 to ensure the immunity for state law-related claims is secured.

For some stations the Music Modernization act won’t mean much of a change. They’ve opted to pay all along on pre-72 records rather than complicate record-keeping by figuring out which songs they could spin royalty-free. For those broadcasters, the RMLC says they may not need to make any additional payments in order to secure state-level immunity. That’s something a station will need to determine with its attorneys, it points out.

But in the long run, the Music Modernization act will mean that there’s no option for stations not to pay royalties on pre-72 records. Failing to secure a license could lead to copyright infringement damages, which could cost as much as $150,000 per record played. That said, on-air spins remain exempt because the bill did not address performance rights for AM/FM radio.

The new law also changed some rate court procedures that the music industry thinks will work in its favor. The previous system, whereby each performance rights organization is assigned to a single judge in U.S. District Court in New York, will end, and a federal judge will instead now be selected at random. That’s something the music industry believes will ensure the judge takes a look at fresh evidence for each rate dispute without relying on a lingering impression derived from prior cases. The new law also gives ASCAP and BMI more leeway in presenting evidence in rate court as part of an effort to use the rates paid by digital music services as a relevant benchmark when setting rates for radio. Songwriters believe this will help them collect more money from broadcasters.