Unlike ASCAP and BMI, SESAC’s music licensing rates are not subject to scrutiny by a federal court, and SESAC’s music licensing practices appear to raise serious antitrust concerns.
In recent years, SESAC has consistently imposed aggressive (and, in our opinion, unfair) unilateral fee increases upon the radio industry. To avoid risking exposure to copyright infringement, the industry has felt compelled to renew licenses with SESAC on SESAC’s terms. Avoiding use of SESAC music altogether is difficult, especially given that SESAC does not make its repertory available in a format that facilitates systematic screening of SESAC content.
SESAC’s current license commenced in 2009 for an initial term of one year. The license is automatically renewed for successive one-year periods unless a party elects to terminate the agreement at least 90 days prior to the beginning of the next renewal period.
If your station is or may be performing SESAC music, you should be prepared to execute a SESAC license, even though you may believe the fees to be exorbitant. Some stations have been able to secure nominal fee relief by submitting updated spot rate data (highest one-minute rate) that SESAC utilizes as a fee determinant. You should also make sure that SESAC has the correct MSA (Metro Survey Area) designation for your station(s).
Streaming and HD Radio Note:
Unlike ASCAP and BMI, the basic SESAC over-the-air license does not cover HD multicasting or simulcast streaming of the analog or HD signal to a station’s website. Stations are required to execute a license addendum and pay an additional fee in order to secure coverage for streaming and HD multicasting.
Attorney David Oxenford (Davis, Wright, Tremaine law firm) discusses SESAC streaming and HD Radio licensing provisions:
TV Broadcasters Sue SESAC (from Billboard magazine)
November 04, 2009 - Legal and Management | Publishing
By Ed Christman, N.Y.
A group of television broadcasters have filed a class-action anti-trust complaint against SESAC, according to the Television Music License Committee, a non-profit organization which represents 1,200 local television broadcasters in negotiations on music licensing fees with performance rights societies.
According to the Television Music License Committee press release on the court documents, SESAC had previously negotiated licenses for local television stations through the TML Committee, but in 2008 it decided to license broadcasters individually.
The complaint alleges that all stations are compelled to pay SESAC the price it demands for a license because they can\'t control what music is used in its programs and commercials.
Unlike ASCAP and BMI - which operate under voluntary consent decrees signed in 1941 and amended in 1950 after the U.S. Department of Justice sued ASCAP for violations of the Sherman Antitrust Act - SESAC is not subject to the consent decrees and can negotiate individual licenses, which the Committee believes results in fees that are in excess of what would be reasonable under an industry-wide license.
The complaint was filed in the U.S. Southern District Court of New York by Weil, Gotshal & Mangles LLP on behalf of Meridith Corp. Scripps Howard Broadcasting, Channel 7 of Detroit, Tampa Bay Television, Hoak Media of Nebraska and others.
While a spokesman for the TML Committee confirms the suit was filed today and even provided a copy of the suit, it didn\'t have a court stamp on it, showing when it had been received. He says that will follow in a day or two.
SESAC was unavailable for comment and didn\'t immediately return a phone call.
Copy of the complaint by Bruce Rich, Esq., of the Weil, Gotshal & Manges law firm:
