Please note this hypothetical is an example for illustrative purposes and does not describe the full extent or all examples of the requirement that all Offerings be reported separately.
Hypothetical Scenario for Phono 4 Reporting
A DSP makes available the following consumer Offerings under the Blanket License with the following hypothetical subscribers for January 2023 usage:
|Individual Standalone Portable Subscription Plan
|100 Family Plans (300 total End Users)
|Bundled Subscription Offering with Product A
|Bundled Subscription Offering with Products B and C
The DSP must identify each of these five Offerings as a separate Service Configuration in header/summary files, and must provide five separate usage files (one for each of the five Service Configurations) that reflect the usage associated with each Offering.
DSPs are not required to subject the same portion of Service Provider Revenue, TCC, Subscribers, Plays or Performance Royalties to the calculation of royalties for more than one of the five Offerings in an Accounting (i.e., monthly) Period.
Specific Reporting Requirements For Student and Family Plan Subscribers:
In reporting Family Plans, DSPs should continue to follow the instructions in The MLC documentation and report only the number of paying Family Plan accounts without adjustment to account for the treatment of Family Plans and without including total associated End User counts. Thus, in this example, the DSP would report 100 subscribers for its Family Plan Service Configuration.
In reporting Student Plans, DSPs should continue to follow the instructions in The MLC documentation and report the number of Student Plan End Users without adjustment. Thus, in this example, the DSP would report 100 subscribers for its Student Plan Service Configuration.
(Note that if a DSP is reporting on the “regular path” such that it is not receiving an invoice from The MLC prior to payment of royalties, then the DSP will have to follow 37 C.F.R. 385.21(e) to adjust these Family Plan and Student Plan subscriber counts for the purposes of computing per-subscriber rates and royalty floors. If a DSP is reporting on the “early path,” then The MLC will perform those adjustments and calculations.)
Improper Reporting Will Be Rejected By The MLC – An example of what NOT to do:
A DSP should not combine any of its five Offerings or their associated usage data in reporting to The MLC. As 37 C.F.R. 385.21(b) provides:
“If a Service Provider makes available different Offerings, royalties must be calculated separately with respect to each Offering taking into consideration Service Provider Revenue, TCC, subscribers, Plays, expenses, and Performance Royalties associated with each Offering…”
- Do not combine all Standalone Service Offerings
A DSP should not report a single Service Configuration that combines usage from its Standalone Individual Plan, Family Plan, and/or Student Plan. This is true whether or not a DSP intended to adjust subscriber counts prior to reporting for the purposes of computing per-subscriber rates and royalty floors.
Thus, a DSP should not report a single standalone portable Service Configuration that combines usage from Standalone Individual, Family, and Student Plans with either:
- 300 combined unadjusted Subscriber counts or
- 325 adjusted Subscribers:
100 (Individual Subscribers)
+ 175 (100 Family Subscribers * 1.75 [previously 1.5 under Phono II])
+ 50 (100 Student Subscribers * .5)
Please see 37 C.F.R. 385.21(e) to compute applicable per-subscriber rates and royalty floors.
- Do not combine all Bundled Service Offerings
A DSP should not report a single Service Configuration that combines usage from its Bundled Subscription Offering with Product A and its Bundled Subscription Offering with Products B & C. Thus, a DSP should not report a single Bundled Subscription Offering with 100 subscribers and other combined usage details.