TAG's Cohen, SomaFM's Hodge, SoundExchange's Prendergast join RAIN Summit West legal/royalties panel

Monday, March 11, 2013 - 12:10pm

We recently announced that the webcasting industry's foremost expert on legal and royalty issues David Oxenford would moderate the RAIN Summit West panel "The Song Plays On" (in RAIN here). Oxenford and his panel will discuss current issues regarding Internet radio royalties -- from the viewpoints of services, copyright owners, and creators alike.

Joining David will be Ted Cohen (top right), Managing Partner, TAG Strategic, a digital consulting firm for the entertainment, technology, and mobile industries whose clients include the UK's Amazing Radio and Canadian Music Week. Cohen helped craft the licensing agreements that made the Rhapsody subscription service and the iTunes Music Store possible. He formerly served as SVP/Digital Development & Distribution for EMI Music and EVP of Digital Music Network Inc.

Like Ted, SomaFM GM & Program Director Rusty Hodge (left) is familiar to many RAIN readers and RAIN Summit attendees. Rusty first worked in radio in the Los Angeles area, but was soon developing software for broadcasters, multimedia, and founding Hodge Interactive to put radio and TV stations on the web. He first experimented with online radio in 1995, then officially launched in February, 2000. The listener-supported service boasts over 20 expertly-curated channels of music, and streams over 5.8 million listener-hours a month. SomaFM also offers podcasts -- one recent podcast that may be of industry interest is a discussion on the new financial realities of the digital streaming music business and how to improve indie artists' situation (in two segments, here and here).

Also joining the discussion will be Brad Prendergast (bottom right), who is Senior Counsel for Licensing & Enforcement with SoundExchange. SoundExchange is the recording industry body that collects and distributes most royalties webcasters (and others that make digital performances of copyright sound recordings) pay. Prendergast works to ensure licensees are in compliance with the terms of their licenses. He's a gradutate of the University of Virginia School of Law and Notre Dame.

RAIN Summit West is Sunday, April 7 in Las Vegas. The annual full-day Internet radio conference is a co-located education program of the NAB Show. Now in its 12th year, the Summit focuses on the intersection of radio and the Internet. Keynoting the even will be RAB president and CEO Erica Farber (more in RAIN here) and Rhapsody International president Jon Irwin (more here). Register today, while flights and hotels are still readily available, via the RAIN Summit West page.

Top online radio legal experts to explain recent royalty developments at RAIN Summit Dallas

Thursday, August 23, 2012 - 12:05pm

At least two members of Congress have recently announced plans to introduce bills concerning the royalties webcasters pay to perform copyright sound recordings. News of the proposed legislation from Congressmen Chaffetz (here) and Nadler (here) bookended a Brookings Institution call for reform of webcast royalty determination (here).

For clarity on the complex topics of royalties and music licensing we'll turn to three of the industry's top legal experts for our "Music Licensing Roundtable" panel at RAIN Summit Dallas. RAIN readers are well familiar with attorney David Oxenford. He's a Washington, D.C.-based partner at Wilkinson, Barker, Knauer LLP, and he's represented the webcasting industry before Congress and in royalty negotiations. He'll lead the discussion with SESAC VP/Industry Relations & Business Communications Greg Riggle (left) and SoundExchange General Counsel Colin Rushing (right). 

RAIN Summit Dallas takes place September 18th -- the day before the start of the RAB NAB Radio Show, and at the same location: the Dallas Hilton Anatole. Please visit the RAIN Summit Dallas page for registration info, agenda, speaker roster, and more.

Immediately following the "Music Licensing Roundtable," knowDigital president Sam Milkman will present updated results of his company's ongoing study of "Successful Streaming Audio Brands." Then shortly after that will be the keynote address (more here) from Clear Channel Media and Entertainment President of National Sales, Marketing & Partnerships Tim Castelli (left). The afternoon also includes RAIN publisher Kurt Hanson's "State of the Industry" address, and the presentation of the third-annual RAIN Internet Radio Awards.

You can see the full RAIN Summit Dallas agenda, with a complete rundown of panel topics and speakers, here.

The Radio Show is currently offering a special two-for-one discount if you plan to attend both the Radio Show and RAIN Summit Dallas. Just register for the Radio Show (here), and make sure you select the "Radio Show/RAIN Summit Two-for-One Discount" option. See you in Dallas!

(We'd also like to remind you about our inaugural RAIN Summit Europe, coming up October 5th in Berlin. You can find more details on that, and links to register, here.)

Judge: Former on-air personalities' webcast does not violate noncompete

Thursday, July 26, 2012 - 12:20pm

Pat DeLuca and Charlotte DiFrancoA judge in Ohio has ruled that a webcast hosted by two former on-air personalities does not violate the noncompete clause in their contracts.

Pat DeLuca and Charlotte DiFranco hosted "The DeLuca Show" on Lexington Township-based Q92 (WDJQ) until early February 2012, when their contracts expired. A few weeks later, the pair launched a similar program online. WDJQ station owner D.A. Peterson Inc. aimed to shut them down, claiming the webcast violated the duo's noncompete clause.

The case went to court in late February. In April, Stark County Common Pleas Judge Charles E. Brown Jr. denied most of Peterson’s requests, including the prohibition of "The DeLuca Show" webcast within 60 miles of WDJQ (RAIN coverage here).

Now Judge Brown has issued a final ruling which allows DeLuca and DiFranco to continue streaming and requires WDJQ to pay them for unused vacation time. "That pretty much ends the case," explained the former on-air personalities' attorney. has more coverage here. You can find "The DeLuca Show" at

Chaffetz's Internet Radio Fairness Act aims to help streaming broadcasters, not just Pandora

Friday, July 20, 2012 - 12:15pm

Broadcaster streamingYesterday we reported on in-progress legislation from Utah Republican Congressman Jason Chaffetz that would aim to change the way Internet radio royalties are determined (RAIN coverage here).

Other trade publications also covered the story, but some presented the issue as "Pandora's fight," more or less: "Pandora’s in Washington, pushing for a 'level playing field' on its biggest expense – royalties" (here) and "Congress may help Pandora cut royalties" (here), for example.

But this is (or at least should be), broadcasters' fight, too. Broadcasters -- not just Pandora and other pureplay web radio services -- could have much to gain from what Chaffetz is trying to accomplish.

The statutory performance royalty rate for broadcasters' online streams, like pureplay webcasters, is currently determined by the Copyright Royalty Board using the "willing buyer/willing seller" standard. And that arguably led to rates for broadcasters so high for the 2006-2015 period that the NAB had to cut a separate deal with SoundExchange (just like Pandora and other webcasters did, RAIN coverage here).

The lower rates reached by that separate deal are still apparently unattractive, at least for Clear Channel, which recently cut a deal with Big Machine that exchanged a share of on-air revenue for a break on web royalties (RAIN coverage here and here). The company is reportedly hoping to make other such deals, a good illustration that the largest player in radio sees a future online, but recognizes that royalty rates need to change to better realize that future.

Chaffetz's bill, the Internet Radio Fairness Act, would reportedly move streaming radio royalty determinations to the more prevalent 801(b) standard, the same standard used for satellite radio and cable radio royalty rates. You can find more on the pending bill and the 801(b) standard in our earlier coverage here.

One could also argue that somewhat lower royalty rates will most likely benefit copyright owners too, since high rates are currently inhibiting investment in and the growth of the sector. Higher listening levels to Internet radio could mean greater royalties available to composers, artists, and labels.

All that said, it's important to remember that nothing in Chaffetz's bill -- which is still unfinished -- would actually change web radio royalty rates themselves. It would only change the way in which they are determined, opening the potential for fairer rates in the future.

Additionally, though Chaffetz says he's aiming for parity between music platforms, nothing in his bill reportedly deals with a performance royalty for traditional AM/FM broadcasts.

The Utah Congressman says he’ll determine the next steps for his bill by the end of the month. "We’ll probably get disrupted with the August break, but despite the present election, we’ll keep going forward," he told The Hill (here).

Ohio judge rules broadcast radio non-compete does not apply to Internet radio

Thursday, April 19, 2012 - 11:00am

Charlotte DiFranco and Patrick DeLucaAfter leaving Ohio station WDJQ-FM, two morning hosts -- like many others -- started their own Internet radio station. But WDJQ sued the former hosts for violating a one-year noncompetition provision.

Stark County Common Pleas Court Judge Charles E. Brown denied the injunction request. The Youngstown Vindicator writes (here) it may "be a landmark case."

"It’s definitely a first-of-its-kind thing," said the attorney representing the two hosts. He argued that the non-compete did not apply because it only barred the duo (Patrick DeLuca and Charlotte DiFranco, pictured) from running a business "the same or essentially the same as a commercial radio station."

DeLuca and DiFranco broadcast three live shows weekly from

Hat-tip to Radio-Info and Tom Taylor.

Lawsuit against SoundExchange could gain much for SiriusXM, broadcasters, webcasters with little risk

Wednesday, April 4, 2012 - 11:10am

Kevin GoldbergIn the upcoming legal battle between SiriusXM and SoundExchange, the satellite radio broadcaster (along with broadcasters and others) has everything to gain, while SoundExchange and the CRB face potentially serious set-backs. So argues Kevin Goldberg, Special Counsel at Fletcher, Heald & Hildreth, in the CommLawBlog.

Last week news broke that SiriusXM had sued SoundExchange and the American Association of Independent Music (A2IM), accusing the record industry organziations of interfering with its efforts to directly license the sound recordings (find RAIN's coverage here).

The eventual outcome of the lawsuit aside, Goldberg (pictured) says SiriusXM "made the right play... litigation is expensive, but not as expensive as the $200 million in royalties that SiriusXM claims to have paid last year," he writes. "Add in the fact that a victory would not only reduce that expense, but also afford SiriusXM more flexibility in future negotiations and the ability to innovate."

Moreover, broadcasters (and, RAIN would add, webcasters) stand to "reap the benefits" of SiriusXM's lawsuit "without any effort." Goldberg echoes Davis Wright Tremaine partner David Oxenford (RAIN coverage here) in reasoning that SiriusXM's direct licensing deals "would provide important concrete data – possibly the only such data – regarding the value of a digitally transmitted sound recording" in future CRB royalty hearings for both SiriusXM and broadcasters.

"This would be especially important if the broadcasters’ own worst case scenario – enactment of the Performance Rights Act – were to occur," writes Goldberg.

The outlook is less rosy for SoundExchange. The royalty collection agency faces, at the very least, a long and expensive legal battle, Goldberg argues. At worst, it could face "possible dismantling... or the imposition of some limiting consent decree... or the forced introduction of a competitor receiving agent."

Quote from Goldberg

The lawsuit may also "be enough to rethink the entire regime" of the Copyright Royalty Board (CRB), writes Goldberg. "From allowing SoundExchange to exist without competition to siding with SoundExchange on virtually every contested fact in the 2007 Webcasting II decision (and many other ratemaking proceedings), the CRB may have created the environment that allowed questionable, if not illegal, activity to flourish."

The constitutionality of the CRB and its appointment process have been repeatedly questioned and challenged in the past (RAIN coverage here, here, here and here).

But who wins or loses this particular lawsuit may be "beside the point," says Goldberg. "The mere initiation of the case may represent an early tremor signaling the onset of a seismic event, an event that would likely, one way or another, fundamentally affect all the players."

You can find Goldberg's extensive analysis and explanation of the SiriusXM lawsuit against SoundExchange and A2IM here.

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