Posted on 05/21/2002 12:36:37 PM PDT by mhking
May 21, 2002
The United States Copyright Office on Tuesday rejected an arbitration panel ruling on Webcasting royalty rates, a decision that brought smiles to the face of Internet radio executives nationwide.
In a brief note posted on its Web site, the Librarian of Congress rejected the recommendation by the Copyright Arbitration Royalty Panel (CARP) that would have set royalty fees at 14/100 of a cent per performance, a price tag denounced by Webcasters as prohibitive.
"The Register of Copyrights recommends, and the Librarian agrees, that the CARP's determination must be rejected. A final decision will be issued no later than June 20, 2002," the Copyright Office said.
"In accordance with 17 U.S.C. 802(f), the Librarian is given 90 days from date of delivery of a CARP report to review the determination and issue a decision setting forth the final royalty fee and terms of payment. However, if the Librarian rejects the CARP's determination, section 802(f) provides an additional 30 days for the Librarian to render his final determination," it added.
Kurt Hanson, who led a grassroots campaign to have the CARP recommendation thrown out, was positively giddy in reacting to Tuesday's rejection.
"This was what Webcasters had hoped for when we originally objected to the CARP recommendation. I think the decision (on a royalty rate structure) is in good hands. I think they understand the legislative intent of a statutory royalty, which is to encourage the growth and diversity of the industry," Hanson said.
"I have confidence that whatever mechanism they use, it won't destroy the industry," he added.
For its part, the Recording Industry Association of America (RIIA) said today's rejection should not be automatically seen as an automatic win for Webcasters.
"The Librarian has rejected the arbitration panel's determination, but we do not know why or what decision the Librarian will ultimately make based on the evidence presented," said RIAA president Cary Sherman.
"Since both sides appealed the panel's determination, anything is possible. We look forward to the conclusion of this process on June 20th, and to the day when artists and labels finally get paid for the use of their music," Sherman added.
SoundExchange, the RIAA-run group responsible for royalty collection, seemed more resigned to the fact the structure would be modified in favor of the Webcasters.
A statement from SoundExchange executive director John Simson was suggesting long-term "creative solutions" between the recording industry and the Webcasters. "Given the complexity of the issues, I am not surprised by the Librarian's decision. I remain confident that we can find creative solutions to enable Webcasting to thrive while providing recording artists and those who invest in sound recordings a fair and equitable royalty in return," Samson said.
"Over the past three years, Webcasters have paid for bandwidth, rent, hardware, software and other business expenses. It is time that they finally start to pay the Artists and record companies whose creative output is the most important component of their business," he added.
Samson called for the two sides to find "long term solutions" but did not address the potential of a reduced rate structure from the copyright office.
Regardless of the RIAA spin, Tuesday's landmark decision is seen as a massive win for the Webcasting community, which spent the last few months in a bitter campaign to have the CARP ruling thrown out.
Earlier this month, the anti-CARP lobby took its campaign to Washington to protest the royalty rate structure they believe would have "effectively bankrupt" the entire sector.
That came on the heels of a 'Day of Silence' protest against the ruling.
The original CARP recommendation had fixed royalty fees for Web radio stations at 14/100 of a cent per performance, retroactive to October 1998.
Regards,
TS
Internet radio should have to pay as much as AM/FM stations have to pay.
great to meet you Ag!
Most Internet Radio owners have no problem with this notion. The problem was that the RIAA was demanding that 'net radio stations have to pay more than AM/FM stations, and pay those fees per user, per song, retroactive to 1998.
Outside of the big boys (MS, AOL, Yahoo!, Viacom/MTV and a few others), the smaller stations wouldn't be able to play and either go out of business, or locate their servers overseas. All this appeared to be was a massive money grab by the RIAA under the guise of the Copyright Office.
So, scam? Yes. But not by the people that you think were benefitting.
Now I'm sitting on the sidelines watching to see how it turns out.
Considering that most talk radio stations use music as bumpers going into/out of breaks, I would say so, but to a lesser degree.
Please forgive my glaring oversight. I hope next time I do an interview my Mic actually works ;-) Thanks for all that you do, Mssr and Mademoselle Senior Executive Producer's.
Regards,
TS
Generally stations pay to use music for bumpers, but depending on the circumstances there can be exceptions. I do know that at one point, Chrissie Hynde demanded that EIB stop using "The City is Gone" for Rush's theme, but these days, the theme is there, stronger than ever. I don't know how the situation was actually resolved.
It's simple: The law says that anyone can use any published song for anything they want, as long as they pay the royalties on it. The EIB dutifully pays its royalties on Hynde's song, so there's not a damn thing she can do about it.
Keep this in mind the next time some liberal musician demands a GOP candidate stop using their music at campaign rallies. Make sure the candidate's staff knows the musician has no right to stop them from playing the song 100 times a day if they want, as long as they pay the fee to the record company.
My experience in radio was that AM/FM stations didn't have to pay anything to air a song. They were doing the label a favor by giving free advertising. Hell, the station I worked at received free albums in the mail every day with a "Please Play Me" letter attatched.
When I say this is a "scam" I mean, the record labels aren't entitled to any money from a web broadcast....as far as I'm concerned.
If it's streamed it's no different than a AM/FM station.
(Don't bother replying if you have an opposing view. This is one of those issues that I can't be budged on.)
>:P
No apology necessary. Direct payments to record labels is not only not necessary (you are correct in that regard), but it is illegal ("payola" and all). The payments go to the licensing organizations (BMI, ASCAP, SESAC), who then pay out (supposedly) to the artists themselves. In all actuality these payments go to those outfits, to the record labels, to the RIAA, and very little actually goes to the artists themselves. But this system of payment for a performance (which is what the playing of a record - I know, I'm dating myself - is) has been in place for many years.
No one has been able to come up with an equitable system for dealing with the instant medium and resource that the internet has become. Certainly no one ever dreamed of streaming or downloadable music. The RIAA was being cut out of the picture, simply because it had received their cut from the sales of tapes and recording media. With digital presentation, these media are not profiting as much for them. So they had to find a way to gain more money. They thought they could ramrod this through and get what they wanted, especially since part one of their plan worked to a measure - the destruction of Napster.
But I digress. Bottom line is that you are right -- there is no reason that web media should have to pay any more than broadcast media. And the larger stations, with large numbers of listeners should certainly be on the same page with mainstream broadcast stations.
The only place where you and I disagree is that I feel that hobbyists should be exempt from those rules, and if paying anything, their fees should be miniscule.
Most commercial FM music stations get *paid* to play specific libraries of music. Airtime drives sales of CD's. The music owners should embrace internet transmission because it greatly lowers the cost of advertising making less mainstream music financially viable. Of course that may eat into sales of the traditional commercial crap.
This is bigger than BMJ doing a return stint!!!!
I do know that at one point, Chrissie Hynde demanded that EIB stop using "The City is Gone" for Rush's theme, but these days, the theme is there, stronger than ever. I don't know how the situation was actually resolved.IIRC, Hynde's record company (Warner Brothers) threatened EIB with a cease and desist to stop playing the opening riff from the PRETENDERS' "My City Was Gone" and for almost a week a few years ago, the song was not used. Rush made a big deal about it on the show and somehow was put in contact with Hynde and evidently a deal was struck.
Kit Carson (Rush's producer) says at www.pretenders.org, radio stations and networks pay umbrella licensing fees to royalties collection agencies that allow them to use whatever music they choose.
As to why he uses the song: www.metroactive.com
Limbaugh noted that he tried a number of rock songs for his theme music. A few callers griped that a "conservative guy" should not be identified with a rock & roll sound. To "tweak" these fans, Limbaugh searched for "the hardest-pounding bass line" he could find and selected "My City Was Gone."Was he aware he had picked the work of an animal rights activist and an ideological opponent?
He sure was. He relished that. "It was icing on the cake that it was [written by] an environmentalist, animal-rights wacko - and an anti-conservative song. ... It is anti-development, anti-capitalist. ... Here I am going to take a liberal song and make fun of [liberals] at the same time."
(Hynde, as the publisher and writer, does receive performance royalties through ASCAP for the airplay on Limbaugh's show.)
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