§ 385.22 - Royalty floors for specific types of offerings.

§ 385.22 Royalty floors for specific types of offerings.

(a) In general. The following royalty floors for use in step 3 of § 385.21(b)(3)(ii) shall apply to the respective types of Offerings.

(1) Standalone non-portable Subscription - streaming only. Except as provided in paragraph (a)(4) of this section, in the case of a Subscription Offering through which an End User can listen to sound recordings only in the form of Eligible Interactive Streams and only from a non-portable device to which those Streams are originally transmitted while the device has a live network connection, the royalty floor is the aggregate amount of 15 cents per subscriber per month.

(2) Standalone non-portable Subscription - mixed. Except as provided in paragraph (a)(4) of this section, in the case of a Subscription Offering through which an End User can listen to sound recordings either in the form of Eligible Interactive Streams or Eligible Limited Downloads but only from a non-portable device to which those Streams or Eligible Limited Downloads are originally transmitted, the royalty floor for use in step 3 of § 385.21(b)(3)(ii) is the aggregate amount of 30 cents per subscriber per month.

(3) Standalone portable Subscription Offering. Except as provided in paragraph (a)(4) of this section, in the case of a Subscription Offering through which an End User can listen to sound recordings in the form of Eligible Interactive Streams or Eligible Limited Downloads from a portable device, the royalty floor for use in step 3 of § 385.21(b)(3)(ii) is the aggregate amount of 50 cents per subscriber per month.

(4) Bundled Subscription Offerings. In the case of a Bundled Subscription Offering, the royalty floor for use in step 3 of § 385.21(b)(3)(ii) is the royalty floor that would apply to the music component of the bundle if it were offered on a standalone basis for each End User who has made at least one Play of a licensed work during that month (each such End User to be considered an “active subscriber”).

(b) Computation of royalty rates. For purposes of paragraph (a) of this section, to determine the royalty floor, as applicable to any particular Offering, the total number of subscriber-months for the Accounting Period, shall be calculated by taking all End Users who were subscribers for complete calendar months, prorating in the case of End Users who were subscribers for only part of a calendar month, and deducting on a prorated basis for End Users covered by an Offering subject to subpart D of this part, except in the case of a Bundled Subscription Offering, subscriber-months shall be determined with respect to active subscribers as defined in paragraph (a)(4) of this section. The product of the total number of subscriber-months for the Accounting Period and the specified number of cents per subscriber (or active subscriber, as the case may be) shall be used as the subscriber-based component of the royalty floor for the Accounting Period. A Family Plan shall be treated as 1.5 subscribers per month, prorated in the case of a Family Plan Subscription in effect for only part of a calendar month. A Student Plan shall be treated as 0.50 subscribers per month, prorated in the case of a Student Plan End User who subscribed for only part of a calendar month.

[84 FR 2031, Feb. 5, 2019, as amended at 84 FR 32316, July 8, 2019]