CR Judges Announce Receipt of Notices to Audit 2009-2011 Statements of Account of DKCM, Inc. and Greater Media, Inc.

The Copyright Royalty Judges have announced receipt of two notices to audit the 2009, 2010, and 2011 statements of account submitted by DKCM, Inc., a commercial webcaster, and Greater Media, Inc., a broadcaster.

The notices were submitted by SoundExchange, Inc., the organization charged with collecting royalty payments and statements of account and distributing royalties to copyright owners and performers entitled to receive them under sections 112 and 114 of the Copyright Act.

The Copyright Act, title 17 of the United States Code, grants to copyright owners of sound recordings the exclusive right to perform publicly sound recordings by means of certain digital audio transmissions, subject to certain limitations. Specifically, this right is limited to two statutory licenses. The section 114 license allows the public performance of sound recordings by means of digital audio transmissions by nonexempt noninteractive digital subscription services and eligible nonsubscription services.

The second license allows a service to make any necessary ephemeral reproductions to facilitate the digital transmission of the sound recording.

Licensees may operate under these licenses provided they pay the royalty fees and comply with the terms set by the Copyright Royalty Judges. The rates and terms for the section 112 and 114 licenses are set forth in 37 CFR part 380.

As part of the terms set for these licenses, the Judges designated SoundExchange, Inc., as the organization charged with collecting the royalty payments and statements of account submitted by eligible nonsubscription services such as, among others, Commercial Webcasters and Broadcasters, and distributing the royalties to the copyright owners and performers entitled to receive such royalties under the section 112 and 114 licenses. 37 CFR 380.4(b)(1) (Commercial Webcasters), 380.13(b)(1) (Broadcasters).

As the designated Collective, SoundExchange may conduct a single audit of a licensee for any calendar year for the purpose of verifying their royalty payments. SoundExchange must first file with the Judges a notice of intent to audit a licensee and serve the notice on the licensee to be audited. 37 CFR 380.6(c),380.15(c).

On August 8, 2012, SoundExchange filed with the Judges separate notices of intent to audit DKCM, Inc., a Commercial Webcaster, and Greater Media, Inc., a Broadcaster, for the years 2009, 2010, and 2011. Sections 380.6(c) and 380.15(c) require the Judges to publish a notice in the Federal Register within 30 days of receipt of the notice announcing the Collective’s intent to conduct an audit.

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