Performance Rights and New Media Glossary of Terms

September 1, 2022

Ray Hair  -  AFM International President

This month I am providing a list of frequently used phrases and acronyms seen in print and heard in discussions involving new media and sound recording performance rights. This list consists of some terms that have evolved in the course of negotiations with media producers, relevant rights, legislation affecting music distribution and streaming, and finally performance rights organizations.

New Media—Forms of media that rely on the internet for content distribution and consumption. In Federation media agreements, upfront payments to musicians embodied in the production of covered content that is made for new media (produced for release on web-based platforms, usually SVOD, such as Disney+, Amazon, Netflix) generally follow the existing scales of traditional media agreements. A residual payment is determined by whether covered content is “made for” or “moved over” from traditional media. When traditional linear content, such as a theatrical film, a TV film, or a linear live TV program or excerpt is licensed to web-based AVOD or SVOD platforms, it has been “moved over” from its primary market, such as a theater or broadcast television, for release on an internet streaming platform.

User-Generated Content (UGC)—Also known as user-created content, refers to any content that embodies images, text, video, or audio posted by a user on an online advertiser-based platform such as YouTube, or on social media sites, such as Facebook.

Interactive Streaming—An on-demand subscription-based platform where consumers may select and choose what song to listen to. Selections may be replayed, fast-forwarded, or skipped (hence interacting). Examples are Spotify, Apple Music, Google Play.

Noninteractive Streaming—Digital audio transmitted via internet by a digital service provider (DSP) where the consumer is presented with a continuous audio stream but cannot choose what song is played next and cannot replay or skip content. Also known as satellite radio or web radio. Examples are SiriusXM, Pandora, and cable-operated music channels.

AVOD (Advertiser-supported Video On-Demand)—Free to consumer video platform that requires the viewer to watch advertisements before and during the streaming of content. YouTube is the most popular AVOD platform.

SVOD (Subscription-based Video On-Demand)—Subscription model where consumers are charged a periodic fee for unlimited access to a streaming platform library, without advertiser interruption. Examples include Netflix, Amazon, Hulu, Peacock, Paramount+, Disney+, HBO Max.

DSP (Digital Service Provider)—A digital distribution platform where streams of audio and/or video content are available, either on a subscription-based or advertiser-based free-to-consumer basis. Examples include Spotify, Pandora, Apple, Amazon, SiriusXM, Paramount+, Disney+, Hulu, HBO Max, YouTube.

OTT (Over the Top)—Refers to streaming services where SVOD or AVOD platforms are available direct to consumers via internet, bypassing cable or satellite TV apparatus. Example: a consumer may subscribe to HBO Max with direct platform access via smart TV, smartphone, tablet, and PC, avoiding a cable box subscription.

DPRA (Digital Performance Right in Sound Recordings Act of 1995)—Amended the US Copyright Act of 1976 in response to music industry fears that web-based distribution of recorded content would eventually eliminate sales of physical products—compact discs, tapes, vinyl records. The law granted a performance right in a sound recording, limited to digital transmission. It also established a royalty payable to the copyright owners of a sound recording (usually the record label or producer), and to featured artists, session musicians, and singers.

1) Noninteractive digital service providers (such as SiriusXM, free Pandora) would be required to pay a statutory per-stream license fee (now .0022–.0028) set by the Copyright Royalty Board (CRB) to SoundExchange, which distributes remuneration as follows: 50% to the copyright owner of the recording, 45% to the featured artist, and 5% to AFM & SAG-AFTRA Fund for further distribution to nonfeatured artists (session musicians and singers who performed the recording).
2) Interactive digital service providers, such as Spotify, Apple Music, Google Play, are required to negotiate a license fee directly with the copyright holder (record label or producer). Featured artists are paid according to their royalty artist contract with the label. Nonfeatured artists get nothing.

DMCA (Digital Millennium Copyright Act of 1998)—Heightened penalties for online copyright infringement and criminalized the circumvention of measures to prevent online piracy. In addition, DMCA limited the liability of DSPs, such as Facebook and YouTube, arising from copyright infringement by user postings of user-generated content.

MMA (Music Modernization Act of 2018)—Sought to improve how royalties from music licensing would be paid to songwriters, composers, and publishers, and created an agency to administer a publisher database. It also corrected an oversight in the DRPA that failed to establish digital performance rights in sound recordings made prior to 1972.

AMFA (American Music Fairness Act)—Now pending before Congress, would amend copyright law to apply existing digital performance rights to the terrestrial radio broadcast industry. If adopted, the legislation would require payment to copyright owners (usually the producer or record label), featured artists, session musicians, and singers whenever their sound recordings are broadcast by terrestrial AM/FM radio stations. The law would cover performances and US over-the-air radio broadcasts in much the same way that DPRA applies to satellite radio and webcasters.

AFM & SAG-AFTRA Fund (www.afmsagaftrafund.org)—Collects and distributes performance right royalties established by US government statute under the DPRA and the MMA, and from various foreign countries, which provide for payment from digital media to nonfeatured performers—session musicians and vocalists.

SoundExchange (www.soundexchange.com)—The largest collective rights management organization (CMO) in the world, SoundExchange is authorized and appointed by the US Congress to collect and distribute digital performance royalties from sound recordings.

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