ASCAP, BMI, and SESAC - Performance Licenses

A. Streaming

Most stations operate under ASCAP, BMI and SESAC licenses covering the performances of these organizations' composers' music by over-the-air transmission. The existing over-the-air radio broadcasting licenses with BMI cover a station's streaming of its over-the-air signal onto the Internet and the agreement that we have reached with ASCAP also covers this activity. This agreement will be presented to rate court Judge Conner for his signature on October 15th 2004.

The over-the-air SESAC licenses however do not explicitly cover a station's streaming of its over-the-air signal on the Internet.

B. ASCAP/BMI/SESAC Nonstreaming Music Use

If your station uses music on its website other than music included in a simultaneous stream of its over-the-air signal (such as a stream of music different from its over-the-air signal or an archive of musical compositions) you may require a separate "Internet" (as opposed to "streaming") license for such activity from ASCAP and/or BMI in addition to the over-the-air streaming licenses discussed above, as such uses may not be considered covered by your over-the-air broadcast license.

Finally, to the extent your station uses SESAC music on its website, it may require a separate license from SESAC for doing so. RMLC has not been able to arrive at industry-wide licenses for any uses from SESAC; this remains a matter of individual station/group negotiation.

II. Digital Performance of Sound Recordings

In addition to licenses from ASCAP, BMI or SESAC (which cover the rights to perform musical compositions), your station may also need a license to perform sound recordings on the Internet. [A musical composition is the series of musical notes and lyrics which comprise a song; a sound recording is the physical embodiment of a musical composition, (such as on a CD, tape or MP3 file.) For example, Paul Anka wrote the musical composition "My Way" which was embodied in a sound recording by Frank Sinatra.] Under the Digital Millennium Copyright Act of 1998 ("DMCA"), the owners of sound recordings (principally record labels and their representative the Recording Industry Association of America ("RIAA")) have the right (for the first time) to license certain audio-only, digital (e.g., Internet) performances of sound recordings. There is no need for a radio broadcaster to obtain a license for over-the-air (conventional broadcast) performances of sound recordings.

The DMCA provides for two methods of obtaining licenses to perform sound recordings on the Internet: for those entities that qualify, a "statutory" license, set by agreement or pursuant to a proceeding before a "Copyright Arbitration Royalty Panel" ("CARP") in the United States Copyright Office; or individual licenses negotiated with the owners of each of the sound recordings that is being performed on the Internet. An entity must meet several requirements in order to qualify for the statutory license under the DMCA. For example, there are limits on the number of recordings from the same artist and the same album that may be played in a row, or within a three hour period. An entity performing sound recordings on the Internet that fails to qualify for the statutory license must obtain a license from the copyright holder of each sound recording that the entity performs in order to avoid copyright infringement liability.

In December, 2000, the Copyright Office issued a ruling in response to a request by the RIAA, declaring that radio broadcasters are not exempt from the provisions of the DMCA and therefore require licenses from RIAA (or other recording owners) to stream over the Internet sound recordings contained in their broadcast signals. This license would be required in addition to any ASCAP, BMI or SESAC licenses required as described above. The National Association of Broadcasters and a number of radio station group owners filed an appeal from the Copyright Office's decision in Federal Court in Philadelphia. The Court upheld the decision of the Copyright Office. Radio broadcasters may now be required to obtain licenses from the owners of any sound recordings that they may have streamed over the internet commencing in October 1998. In addition, any broadcaster that does not qualify for the statutory license may need to reach agreements with the owners of each of the sound recordings they have transmitted during this period, or face potential copyright infringement liability.

In light of these developments, we would strongly encourage any radio station or group that is streaming its broadcast signal over the Internet or otherwise offering music over the Internet to consult counsel to determine whether its use of music on the Internet raises any potential copyright liability and to plan an appropriate course of action on a going forward basis.