A2IM: American Association of Independent Music

Posted in News by A2IM

On Thursday, January 31, 2013 the Sirius/XM -VS- A2IM was settled and dismissed via a Stipulation Agreement signed by Judge Griesa of the U.S. Southern District Court.

The Stipulation Agreement:

• Reaffirms A2IM’s First Amendment rights including the freedom to express whatever opinions A2IM wishes about Sirius/XM and any proposals or terms for licensing with Sirius and the right to make recommendations on such issues, to advocate for or against such issues, and to express agreement or disagreement with the opinions of others on these issues.  This court signed precedent that allows us to freely counsel our members is a huge win!

• At the same time, the A2IM staff and board reaffirms that, at the end of the day, while the statutory rate has ensured equitable treatment for independents, each music label must determine for themselves their own promotional and commerce plans and that we respect that independent entrepreneurial spirit. We’ll just suggest to our members that before agreeing to any direct licenses they should please consider all factors and their effects on their music label’s results, now and in the future, and make an educated decision. In accordance with the entrepreneurial spirit of our members who run their businesses, each of our members should continue to do what is in their business’ best interests knowing, whatever decision or statements they make, that every A2IM label member will always continue to get full A2IM support and benefits. In other words we are required to operate A2IM the way we do today, respecting all of our member’s individual freedom of speech and their freedom to do business in whatever way is in their best interests.

• The full stipulation agreement is HERE.

With this lawsuit behind us, the entire A2IM community looks forward to working closely with Sirius/XM to expand their already strong support of independent music, for both independent music discovery and monetization, especially for certain genres not often heard via other non-on demand broadcast mediums, where we normally do not get much support outside of services like Pandora, SomaFM or public radio.

Finally a big “Thank You” to our lawyers at Mitchell, Silberberg & Knupp (Eric German, Michael Chait, Kevin Gaut and Paul Licalsi) who delivered such a terrific result.

PRESS:  Billboard 2/1/2013

Posted in News, Press Releases by A2IM

SoundExchange announced record distributions for 2012 as digital performance royalties continued to grow. Record labels receive 50% of SoundExchange distributions and Independents share from the reporting services, which include Pandora and Sirius/XM, are strong as these services give greater access to Indie music. The full press statement is here.

Posted in News by A2IM

As we have reported on the A2IM website, Sirius XM has been soliciting independent music labels to enter into direct licensing deals with Sirius instead of pursuing the current statutory licenses, with independently CRB established rates, available through SoundExchange. These reports relate to the value of independent label Copyrights.

Yesterday, Sirius XM filed a complaint with the United States District Court, Southern District of New York against A2IM (and SoundExchange) alleging unlawful interference with trade. We’ve reviewed the complaint and feel that it is completely without merit.  We have engaged outside counsel and plan to vigorously defend our organization against this complaint.

Posted in News by A2IM

Updating our news item regarding SiriusXM Radio seeking direct licenses: Thursday morning’s Billboard.biz published this publicly available article authored by Ed Christman.

Billboard publishes a quote that points out that when the current statutory royalty being paid by SiriusXM to SoundExchange was set by the Copyright Royalty Board (“CRB”) in 2007, the panel said “an appropriate rate was 13%” but financial hardships of the then competing satellite radio companies Sirius and XM were taken into account.  The current rates expire at the end of 2012.  SoundExchange is currently engaged in proceedings and in a separate statement points out that SiriusXM is now merged and the surviving company, SiriusXM, has nearly doubled their subscriber base, eliminated cost redundancies, and is reporting to their investors record profits.

Posted in News by A2IM

A2IM has been receiving numerous calls from members of the independent label community with questions about SiriusXM’s direct licensing requests.  To provide information to our members about the status of the ongoing proceedings for the 2013-2017 rate setting, and about the facts of SiriusXM’s current financial situation, we’re sharing this item that SoundExchange posted on their website Thursday afternoon.

Posted in News by A2IM

On December 14^th, 2010 the Copyright Royalty Board (“CRB”) issued its decision in the Webcasting III rate setting case.  A2IM has three seats on the SoundExchange board (a third of the label seats) and SoundExchange funds the rate setting proceedings on behalf of both artist and label sound recording owners.

The CRB released a 137-page opinion and, based upon our initial review, A2IM is fairly pleased with the outcome.  The CRB adopted commercial rates that are in the neighborhood of the National Association of Broadcasters (“NAB”) for AM/FM digital simulcast radio rates and the Sirius/XM Satellite rates that SoundExchange had previously negotiated in 2009 (although slightly higher in the early years and slightly lower in the latter years). Below are some of the highlights:

Rates for Commercial Webcasters: The CRB adopted the following rate structure for Commercial Webcasters:

2011: $.0019

2012: $.0021

2013: $.0021

2014: $.0023

2015: $.0023

These rates are the general commercial rates for non-simulcasting broadcasting webcasters. The CRB found that the evidence presented shows growth in the webcasting industry which supports an increase in the rate through the term, and that because growth in the industry has occurred unevenly, the rate structure should have longer periods of rate stability instead of annual increases.

Notably, the rates set by the CRB are higher or equal to the rates in the Sirius/XM WSA Agreement, except for 2015.  The Sirius/XM web rates are $.0018 (2011), $.0020 (2012), $.0021 (2013), $.0022 (2014) and $.0024 (2015).

The CRB rejected Live365’s case.  Live365 had proposed a flat rate of $.0009 for every year of the term, plus a 20% discount for aggregators.

Minimum Fee for Commercial Webcasters: The CRB also adopted a minimum fee of $500 per channel or station with a $50,000 cap for commercial webcasters based on the joint stipulation submitted by SoundExchange and Live365.

Adoption of NAB WSA Agreement: The CRB adopted the NAB Agreement as the basis of rates and terms for all simulcasting commercial broadcasters, as defined by the agreement.  Any commercial broadcaster that webcasts during the 2011 – 2015 term must pay under the rates and terms of the NAB Agreement, which are as follows: $.0017 (2011), $.0020 (2012), $.0022 (2013), $.0023 (2014), and $.0025 (2015).

Adoption of CBI WSA Agreement: The CRB adopted the CBI Agreement as the basis of rates and terms for all noncommercial educational webcasters, as defined by the agreement.  Notably, the Court rejected IBS’s objection to that settlement.

Rates for Noncommercial Webcasters:  For noncommercial webcasters that do not qualify as Noncommercial Educational Webcasters under the terms of the CBI Agreement, the CRB adopted SoundExchange’s rate proposal of $500 per channel or station with an annual cap of 159,140 ATH.  The $500 royalty rate also serves as the minimum fee for noncommercial webcasters.  Performances in excess of the ATH cap will be paid at the per-performance rates established for commercial webcasters.

Ephemeral Rate: With respect to the ephemeral rate for both commercial and noncommercial webcasters (this is the rate allocation for the server copy of the sound recording performance of which the sound recording owner gets 100% of the allocation), the CRB adopted SoundExchange’s proposed bundled rate structure, in which 5% of the statutory royalty is attributed to the ephemeral license.

Unrelated to the above it should be noted that in 2010 SoundExchange collected over a quarter of a billion U.S. dollars across all non-terrestrial platforms (webcasting, satellite, cable television, etc.).