SoundExchange compliance Noncommercial webcaster vs. CPB deal SX compliance under CPB rules 1 can be challenging. Noncommercial Webcaster 2 (NW) is another set of rates and terms that some stations might prefer. We compare these two options here, aiming to help station managers understand broadly what switching status would mean. Document version: 2015-05- 12 www.spinitron.com 617 233 3115 Contact: eva@spinitron.com Note to the reader Official webcasting regulations are complex, scattered in various places, and hard to understand. But the differences between CPB and NW are simple enough when stated in plain English. So we wrote the text without unnecessary jargon and in our own words. Endnotes add detail and refer to official sources don t feel you should understand them, or even read them, especially not on first reading. We are available to help if you have any questions or need help with webcasting compliance. Please contact Eva Papp: 617 233 3115 or email eva@spinitron.com.
2 Summary table Noncommercial Webcaster (NW) status is especially interesting for webcasts with fewer than 218 listeners on average. The summary table is for those services. The subsequent text explains everything in the table and adds information for services with larger audiences. CPB deal NW with average number of listeners 218 Royalties Covered by CPB $500/year Data processing fees Timestamp logging Reports Song overlaps Filing Other paperwork Annual fee: Zero for NPR members $250 for NPR stream hosting clients $275 for NFCB members $500 for everyone else Quarterly fee: $500 for incorrectly formatted reports Per spin: Exact start time Either exact end time or exact duration Playlist log: Every spin with exact start+end times Stream log: Every stream connection with IP address and connect/disconnect times Triggers report rejection To NPR via Composer (or playlist log via Spinitron) Quarterly schedule entry in Composer Manual report confirmation None Not required (But it s nice to have approximate timestamps) SX report of use: Audience size during the report period Every song with number of spins during the report period Not relevant To SX via Email, FTP, or Spinitron Monthly Statement of Account Annual royalty payment
3 Simpler reports The key difference between CPB vs. NW reports is the information for each spin of a song 3 : CPB/NPR 4 wants the number of stream listeners to each individual spin 5. NW reports need only the number of spins of each song 6. NPR derives listeners- per- spin from two log files 7 : a streaming log of every connection to your stream (with the listener s IP address and when the connection began and ended); and a playlist log of each spin on the webcast with exact start and end time. NPR charges stations data processing fees for this. NW reports, on the other hand, have no information about spin timing at all. (This may be familiar if you have heard the terms ATH 8 report and ATP report 9. NWs reports are standard ATH reports. The reports to NPR are similar to ATP reports 10.) Easier playlist logging less DJ stress Because the reports are simpler, switching to NW status you can: Stop logging spin end times or durations. Stop logging timestamps with to- the- second accuracy. Relax, knowing that timestamp accuracy is not a compliance concern. If you manage a lot of DJs, this difference can be huge. Most DJs understand why approximate timestamps are useful to the station, listeners, etc. and have no difficulty with them. The same cannot be said for timing capture under CPB rules. Easier reporting less station manager stress Relative to quarterly reporting under CPB rules, as an NW you: Submit just one report 11 (not two: the streaming log and playlist log mentioned above). Submit reports direct to SX by email, FTP or from Spinitron instead of uploading to NPR Composer. Don t need to enter a program schedule into NPR Composer. Won t receive error reports about overlapping songs. Don t need to request and get confirmation that a report was accepted. Producing and filing an NW report in Spinitron is very simple. If you currently use Spinitron to produce NPR playlist logs, the process is similar.
4 Cost comparison There are cash costs to consider either way: NPR charges data processing fees while NWs pay royalties. NPR charges a $500/year data processing fee to stations that are not NPR members. They discount this to $250 for clients of their stream hosting service. NFCB negotiated a discounted rate of $275 for its members. NPR charges an additional per- quarter fee of $500 to process log files that do not conform to their file format specification 12. A NW pays royalty fees to SX. The minimum fee is $500/year, which covers a webcast service with an audience size up to a monthly average of 218 domestic 13 listeners 14. Many stations currently using CPB rules would comfortably fit under the threshold and NW status would be predictable and simple for them. Exceeding the monthly threshold means excess fees 15 are due. That adds complexity but it is perfectly doable and no calamity if you budgeted for it. Appendix B should help with budgeting calculations. Sample vs. census reports A NW submits quarterly sample reports (reporting on the music played 2 weeks 16 in the quarter) if its audience size is below the 218 threshold described above. If the monthly listener count, averaged over one year, exceeds 218 17 then you have to start doing monthly census reports, i.e. reporting every month on all the music played each month. CPB webcasters with large audiences also submit census reports.
5 Appendix A NW management tasks The main text is a comparison of webcasting under CPB and NW rates and terms. This appendix is a summary of what an NW needs to do to comply. Every webcaster 18 must: File a Notice of Use 19 with a $40 fee a one- time thing. A minimum- fee NW must: Send the $500 fee together with the Minimum Fee Statement of Account 20 (SoA) at the start of the year. Submit a Monthly SoA to SX every month 21. It is an Excel form. Very little in the form changes from month to month so you can update last month s, sign and submit. Produce and submit quarterly reports of use, which you can do in Spinitron. (For this you need to know the report- period audience size, see Appendix C) Extra tasks for NWs with larger audiences: For any month in which average listener count exceeded 218 you submit: A monthly SoA stating the excess fee. A form showing your calculation of the excess fee 22. (For this you need to know the report- period audience size, see Appendix C). Payment of the excess royalty fee. If average listener count over a 12- month period exceeds 218 then you start doing monthly census reports.
6 Appendix B Estimating excess fees This is relevant only to stations with webcasts expected to exceed the 218 average listener count threshold. Those paying the minimum fee can ignore it. Don t use this formula to pay excess fees SX has an Excel form 22 for that this formula is the easy version for budgetary estimates and projections. Our simplified approximate formula for excess royalties due in a given month is: Per- listener monthly excess fee multiplied by excess listener count. In which: Per- listener monthly excess fee varies on a sliding scale 23 from about $6.50 24, which is for an all- music station, down to one twelfth of that for a non- music station. (Webcasting regulations assume 12 songs per hour for music shows and 1 for non- music shows.) For example, a college broadcaster with a webcast that is half music shows has a per- listener monthly excess fee of a bit more than $10. If three quarters of programming were music then it would be just over $15. Excess listener count is the average number of listeners during the month minus 218. So approximately projecting excess fees is a pretty simple for a music- heavy station. Multiply $6.50 by the fraction of programming that is music, and then multiply by how much the average number of listeners is likely to exceed 218. The calculation of excess fees is confusing for some people. But there are two reasons not to worry about it. First, if you don t exceed the threshold then you don t need to think about excess fees at all. Second, there are people and tools to help.
7 Appendix C Obtaining ATH numbers Aggregate Tuning Hours (ATH) 25 is the official unit of audience size. ATH is the total number of listener- hours aggregated over some period of time. ATH equals the length of the period of time in hours multiplied by the average number of listeners during the period of time. For an NW, two periods of time are involved: Monthly ATH. ATH for report periods. Minimum- fee NWs do not report monthly ATH. Instead, they certify, on the monthly Statement of Account 20, that it was within the minimum- fee limit. If you are confident your audience size is below the 218 threshold, and that your streaming server logs would prove it, then you don t even need to know your monthly ATH. A report of use includes the ATH for the report period and you need to obtain a number for this purpose. One way is to derive ATH from stream log files. If you outsource streaming to a service provider, they should be able to give you the ATH numbers you need 26. If you or your campus IT service runs your stream server then you can do it yourself. Crunching log files into ATH is impractical by hand but easy for a computer and for Spinitron. Alternatively, you might choose to estimate the reporting period ATH. If you have an idea of the average number of listeners to your stream, you can simply multiply that by the number of webcasting hours in the reporting period. For example, if, on average, there are 20 listener connections to a webcast (with 24- hour programming) and the report period is 2 weeks then the ATH estimate is 20 14 24 = 6720.
8 Endnotes We use simplified language and definitions in the text of this document because the relevant laws and regulations are excessively complex and abstruse. These notes provide the connection between the plain English text and the jargon of webcasting experts. We believe that station management should understand the material in the body but do not need to understand the endnotes. Confidence that your station is in compliance can be had without being an expert. 1 CPB and SoundExchange negotiated an agreement of rates and terms, including reporting, for eligible public radio stations for 2011 through 2015. Published in the Federal Register 74 FR 40614 Appendix C. It includes, among other things, a lump sum royalty payment and aggregate reports, i.e. CPB delivers combined reports for all the stations so SX doesn t have to deal with each station individually. 2 The National Religious Broadcasters, acting through Northwestern College, negotiated with SoundExchange an agreement (under the Webcasters Settlement Act, WSA) of rates and terms for Noncommercial Webcasters (not just religious or educational entities) covering 2011-2015. Published in the same Federal Register 74 FR 40614 notice as the CPB deal 1 but in Appendix D. SX calls this agreement Noncommercial Webcaster (WSA), where WSA means Webcaster Settlement Act. We refer to it as the Noncommercial Webcaster deal, abbreviated NW. 3 We use the word spin to describe the act of a DJ or automation system playing a song on a radio program or webcast. We use song to mean a sound recording that should appear in a report. So a spin is an instance of a song being played on the radio or in a webcast. 4 NPR performs data processing of SX reports on behalf of CPB. The CPB- SX agreement 1 commits CPB to providing aggregate reports covering all participating stations. 5 The CPB- SX agreement 1 does not in fact call for this listener- count per spin data, or even for actual total performances 9 per song, which is a related but simpler 10 standard SX report type. It only calls for aggregate tuning hours 8 data, which is much easier for stations to collect. So the demand for this extra detail in the data comes from CPB and/or NPR, not from SX. 6 This is an ATH report of use. It identifies each song with one or more spin in the reporting period and says how many times it was spun. It also contains the ATH 8 of the webcast during the reporting period. Calling it an ATH report is a bit confusing since it contains one ATH number and thousands of spin count numbers. 7 8 NPR reporting requirements ATH means aggregate tuning hours a confusing term for a fairly simple thing. ATH is a measure of accumulated audience size over a period of time. If you multiply (average number of stream listeners over a given period of time) times (the period of time expressed in hours) you get the ATH for that period of time. So, for example, if you average 50 listeners on your stream then the ATH over a two- week reporting period is (50) (14 24) = 16,800. This description derives from the technical definition of ATH in Federal law 37 CFR 380.2.
9 9 ATP means actual total performances. It is a measure of audience size for a song that was spun (once or more) on a webcast over a specified reporting period (e.g. one month). One performance is defined (roughly) as one client connection to the stream while the song is spun. If you count the connections to the stream during the spin and then total up the counts for each time that song is spun over the reporting period, you get the ATP for that song. An ATP report has a row for each song that received one or more spins during the reporting period. Each row identifies the song and reports its ATP. 10 While the NPR data is similar to an ATP report 9 it actually includes more detail than SX requires in an ATP report. An ATP report doesn t separate out the individual spins and report the performance count and time- stamp of each one. It lumps all the spins of a given song together and reports the total performance count (ATP) of all its spins and omits spin time- stamps. 11 This is the so- called report of use or RoU, which, for an NW, may be either an ATH or ATP report, but since ATH is so much easier we don t consider ATP reporting for NWs. SoundExchange has a help page on reporting requirements. The content and format of the reports is defined in Federal Law 37 CFR 370.3. 12 SoundExchange Reporting Fee Structure. 13 SX is only concerned with listeners in the USA. We can ignore this complication if the average listener count including all listeners worldwide is under 218. If not, we exclude any listener connections originating outside the USA in ATH or average listener count computations. 14 The official threshold definition is in terms of monthly ATH: 159,140. There are (365 12) 24 = 730 hours in a month (or so the definition of monthly ATH assumes). If one listener "tunes in" to your stream for one solid month, that connection accounts for 730 aggregate tuning hours. 218 listeners tuned in for a solid month adds up to 218 730 = 159,140 ATH. So if the average number of connections to the stream taken over a month is not more than 218 then the ATH is not more than 159,140. 15 The official calculation of excess fees is a bit strange. It is a formula based on your ATH for the month and what fraction of your programming in that month was music shows. It is specified in the NW notice 2 and SX has an Excel spreadsheet form. Our version of the formula is given in. 16 The official language is "two 7- day consecutive periods" in the calendar quarter. The two periods may be consecutive or not and can start on any day of the week. Otherwise you are free to choose. Some stations choose to report on the last two weeks of one quarter and the first two of the next in order to get six month s worth of work out of the way in one go. 17 The official definition, again, is in terms of ATH but is not very strict. If your monthly ATH averaged over a one- year period exceeds 159,140 then you switch to monthly census reports. You can return to quarterly sample reporting if it goes below the threshold again. 18 Operating under the statutory license. Stations operating under CPB rules did not need to do this. 19 Online Notice of Use form. 20 Like the IRS, SX doesn t invoice you for how much you owe. You have to use the official rules to figure out the royalty fees and tell them. The Statement of Account (SoA) is the webcaster s tax return, metaphorically speaking. Online SoA form
10 21 This is because of the discounted overage fees for NWs and the way the minimum- fee threshold is defined. 22 SX provides an Excel spreadsheet form for excess fee calculation. 23 The sliding scale, let s call it S, is a multiplier we use to discount the per- listener monthly excess fee. It depends on the fraction of programming that was music shows during the month in question. If we call that fraction M (which is 1 for an all- music webcast and 0 for no music) then, S = (11 M + 1) 12. S turns out to be just a little more than M for music- heavy stations, e.g. M = 0.5 gives S = 0.542 and M = 0.8 gives S = 0.817. 24 The $6.50 per- listener monthly excess fee for a station with all music shows (i.e. before applying the sliding scale) is approximate. For accurate values, multiply the official per- performance excess fee by 730 12, in which 730 is the average number of hours in a month, and 12 is the number of songs per hour in a music show. The per- performance excess fee is $0.00073 in 2013, $0.00077 in 2014, and $0.00083 in 2015 giving per- listener monthly excess fees of $6.39, $6.75, and $7.27 respectively. 25 ATH means aggregate tuning hours a confusing term for a fairly simple thing. ATH is a measure of accumulated audience size over a period of time. If you multiply (average number of stream listeners over a given period of time) times (the period of time expressed in hours) you get the ATH for that period of time. So, for example, if you average 50 listeners on your stream then the ATH over a two- week reporting period is (50) (14 24) = 16,800. This description derives from the technical definition of ATH in Federal law 37 CFR 380.2. 26 Every US- based webcast must comply with SX rules and needs ATH information. A service provider that can t provide it is not up to snuff. Remind the service provider that ATH is accumulated only from connections originating in the USA 13 and only while the stream is not transmitting dead air.