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We hear it all the time – it takes a long time to get song licenses, so great ideas get stuck in the queue and risk running out of time. If you are a streaming service, you may be thinking that the best licensing option is to rely on Section 115 for compulsory licenses and send out NOIs.
As you have probably read in the news, a number of copyright infringement lawsuits have been filed against some digital streaming services for not licensing all songs and not reporting all royalties. If you rely on compulsory licensing you need to make sure you comply with all aspects of the law – it’s complicated and complex – which can lead to errors and exposure.
Crunch Digital advocates direct licenses with music publishers as an alternative to compulsory licensing
We think the best way forward is a direct license between digital streaming services and music publishers under the following basic terms:
- The royalty rates under a direct license should match the statutory royalty rates available for the service type under a Section 115 compulsory license; and
- Render royalty statements to music publishers on a monthly or quarterly basis.
Some reasons why a direct license is better than a compulsory license:
- Speed up the time it takes to get licenses in place for your service.
- Eliminate the exposure that comes with not having a compulsory license in place for each song made available on your service.
- Avoid the time and cost associated with preparing monthly certified statements and annual certified statements of account.
- Avoid the costs of sending out the NOIs.
- It is an opportunity to get the same royalty rate under a direct license as you would under a compulsory license (i.e., the statutory royalty rates) with the same royalty expense – without all the potential problems outlined in a number of the lawsuits that have been filed against some digital streaming services.
Crunch Digital Agency is a turnkey solution.
From licensing through to reporting, let Crunch Digital Agency dramatically simplify and shorten the licensing process, eliminating wasted time, wasted capital, and eliminate the potential exposure that comes with relying on compulsory licenses.