For purposes of this subpart, the following definitions shall apply:
Collective is the collection and distribution organization that is designated by the Copyright Royalty Judges. For the 2007-2012 license period, the Collective is SoundExchange, Inc.
Copyright Owners are sound recording copyright owners who are entitled to royalty payments made under this subpart pursuant to the statutory licenses under 17 U.S.C. 112(e) and 114(f).
Ephemeral Recording is a phonorecord created for the purpose of facilitating a transmission of a public performance of a sound recording under a statutory license in accordance with 17 U.S.C. 114(f) and subject to the limitations specified in 17 U.S.C. 112(e).
GAAP shall mean generally accepted accounting principles in effect from time to time in the United States.
Gross Revenues. (1) Gross Revenues shall mean revenue recognized by the Licensee in accordance with GAAP from the operation of an SDARS, and shall be comprised of the following:
Subscription revenue recognized by Licensee directly from residential U.S. subscribers for Licensee's SDARS; and
Licensee's advertising revenues, or other monies received from sponsors, if any, attributable to advertising on channels other than those that use only incidental performances of sound recordings, less advertising agency and sales commissions.
Gross Revenues shall include such payments as set forth in paragraphs (1)(i) and (ii) of the definition of “Gross Revenues” to which Licensee is entitled but which are paid to a parent, wholly-owned subsidiary or division of Licensee.
Gross Revenues shall exclude:
Monies or other consideration attributable to the sale and/or license of equipment and/or other technology, including but not limited to bandwidth, sales of devices that receive the Licensee's SDARS and any taxes, shipping and handling fees therefor;
Royalties paid to Licensee for intellectual property rights;
Monies or other consideration received by Licensee from the sale of phonorecords and digital phonorecord deliveries;
Sales and use taxes, shipping and handling, credit card, invoice, and fulfillment service fees;
Bad debt expense, and
Revenues recognized by Licensee for the provision of
Current and future data services offered for a separate charge (e.g., weather, traffic, destination information, messaging, sports scores, stock ticker information, extended program associated data, video and photographic images, and such other telematics and/or data services as may exist from time to time);
Channels, programming, products and/or other services offered for a separate charge where such channels use only incidental performances of sound recordings;
Channels, programming, products and/or other services provided outside of the United States; and
Channels, programming, products and/or other services for which the performance of sound recordings and/or the making of ephemeral recordings is exempt from any license requirement or is separately licensed, including by a statutory license and, for the avoidance of doubt, webcasting, audio services bundled with television programming, interactive services, and transmissions to business establishments.
Licensee is a person that has obtained a statutory license under 17 U.S.C. 114, and the implementing regulations, to make transmissions over a preexisting satellite digital audio radio service, and has obtained a statutory license under 17 U.S.C. 112(e), and the implementing regulations, to make Ephemeral Recordings for use in facilitating such transmissions.
Qualified Auditor is a Certified Public Accountant.
Residential means, with respect to a service, a service that may be licensed under the provisions of 17 U.S.C. 114(d)(2)(B); and, with respect to subscribers, subscribers to such a service.
SDARS means the preexisting satellite digital audio radio services as defined in 17 U.S.C. 114(j)(10).
Term means the period commencing January 1, 2007, and continuing through December 31, 2012.