You can copy your music. Everyone in the United States pays a tax indirectly on ALL blank Media and recording equipment. The government has passed several pieces of legislation (Home Recording Act, the Millenium Recording Act, etc.) that require manufacturers and/or distributors of
any digital recording equipment or media to pay a percentage-based tax.
http://www.aarcroyalties.com/forms/AARC%20Summary.pdf SUMMARY OF THE AUDIO HOME RECORDING ACT Introduction This is an exciting and sometimes challenging time for the music business. Digital technology has changed the entire concept of the recording industry's product and how it is exploited. The Audio Home Recording Act of 1992 (“AHRA”) is one of the laws that enable the recording industry to continue exploiting its product in this digital era. In October 1992, the U.S. Congress passed AHRA. Under AHRA, manufacturers and importers of digital audio recorders and blank media are required to make royalty payments to compensate artists and copyright owners for lost royalties due to home taping. These payments are deposited with the U.S. Copyright Office ("Copyright Office"), a federal government agency. Distribution of the royalties to eligible claimants, including featured recording artists and record companies, is administered by the Copyright Office. In response to the passage of this law, the recording industry and the artist community united to form the "Alliance of Artists and Recording Companies" ("AARC"). AARC is a non-profit organization that represents featured performing artists and record companies with regard to AHRA and Japanese sound recording rental royalties. Currently, thousands of featured artists and recording artists are represented by AARC. Participation in AARC has countless advantages. First, by being an AARC participant you will alleviate the time and legal costs that you would otherwise incur in filing and litigating AHRA claims before the Copyright Office. If you choose to represent yourself in these proceeding, the costs could be significant since they include all the Copyright Office's and arbitrators' costs in addition to your own legal costs. Accordingly, it is in our collective interest to minimize government intervention and its associated costs in the distribution of royalties. Also, your participation will provide you an accurate and cost-efficient means of receiving your share of the collected royalties. Under AHRA, royalty payments are placed into two separate funds for the two types of copyrighted works affected by audio home recording -- sound recordings ("Sound Recordings Fund") and musical compositions ("Musical Works Fund"). AARC represents featured recording artists (usually record companies) with regard to the Sound Recordings Fund.
Page 2 Pursuant to AHRA, two thirds (2/3) of the royalty payments are allocated to the Sound Recordings Fund. Of that amount, the Copyright Office releases four percent (4%) to the Independent Administrator for further distribution to non-featured musicians and vocalists. Forty percent (40%) of the remaining Sound Recordings Fund royalties is allocated to the featured recording artists who perform on sound recordings distributed during the year for which the royalties were collected (Featured Artists Subfund). The remaining sixty percent (60%) of the Sound Recordings Fund is allocated to the sound recording copyright owners whose sound recordings were distributed during the relevant year (Sound Recording Copyright Owners Subfund). Ultimate distribution to each featured artist in the Featured Artists Subfund is based on the artist's sales during the year which for the royalties were collected. Similarly, ultimate distribution to each sound recording copyright owner in the Sound Recording Copyright Owner Subfund is based on the sound recording copyright owner's sales during the year which for the royalties were collected. Sound Recordings Fund Royalty Payments To be entitled to a portion of these royalties, an artist or sound recording copyright owner must file an annual claim with the Copyright Office. Once the claims are filed, the claimants must take part in an administrative trial unless they are able to reach a universal settlement. Benefits of AARC participation to both performing artists and record companiesThe filing of annual claims, the evidentiary process before, during and after the arbitration panel can be time-consuming, complicated and burdensome for individual claimants, both in terms of legal fees and procedural costs (Copyright Office and arbitration costs). To alleviate these burdens, AHRA encourages the claimants in each group to agree to the division of royalties among individual claimants within their particular group, and to combine their claims by filing jointly or designating a common agent, such as AARC, to collect their royalties. There are numerous benefits to becoming an AARC participant, therefore, allowing us to represent you as a claimant before the Copyright Office. We are confident that our collective administration of the royalties will: - eliminate the need for time-consuming and costly individual filing and processing of claims; - provide you with the security of accurate claims that are timely filed; - reduce your costs through centralized, common administration and data collection; - produce fair and accurate sales data upon which to base distribution; - reduce the number of controversies needing to be resolved before an arbitration panel, thereby minimizing government and arbitration costs, and expediting payment of royalties to you; and - ensure that you are a part of an organization whose sole efforts are directed toward the long-term interests of artists and record companies.
Page 3 To facilitate the royalty distribution process and to ensure its fairness, we have contracted with SoundScan to be AARC's data source. The SoundScan system registers point-of-sale information on albums and singles from record retailers and others. The SoundScan system provides us with the most comprehensive, cost-efficient, and accurate title specific point-of-sale information on record sales. Finally, in order to enable featured artists and record companies to deal with issues relating to the distribution of their monies, questions or disputes pertaining to the distribution of featured artist or record company funds will be resolved by panels comprised solely of artist and record company representatives, respectively. Additional benefits for performance artists JAPANESE RENTAL ROYALTIES In addition to the numerous benefits mentioned above, performance artist AARC participants are also eligible to receive Japanese sound recording rental royalties (“rental royalties”). On October 14, 1997, after several years of negotiating with Geidankyo1, the Alliance of Artists and Recording Companies ("AARC") reached formal agreements with Geidankyo to distribute rental royalties to featured recording artists. Japan's obligation to pay royalties for the rental of U.S. sound recording stems from the Uruguay Round Agreement on Trade-Related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods ("TRIPS"). Both the U.S. and Japan, as members of the World Trade Organization, are signatories to TRIPS. Japan is one of the few countries that have a sound recording rental market. Although TRIPS includes a provision that prohibits signatories from engaging in the rental of sound recordings, it makes an exception for Japan. Japan is permitted to continue renting sound recordings if it provides remuneration to performers and producers. Geidankyo collects rental fees based on the number of times a sound recording is rented. By June 30 of each year, Geidankyo will distribute featured recording artists' royalties collected during the prior year. The first year for which Geidankyo distributed royalties to AARC was 1996. JAPANESE HOMETAPING ROYALTIES AARC also negotiated a reciprocal home taping agreement with CPRA/Geidankyo. Like the United States, Japan has a home taping law that requires the manufacturers of digital home recording equipment and media to pay royalties to compensate, among others, artists for the displacement of sales caused by home recording. This agreement benefits artists on United States and Japanese sound recordings since it requires AARC to pay CPRA/Geidankyo the United States royalties earned by featured artists on Japanese sound recordings and CPRA/Geidankyo to pay AARC the Japanese royalties earned by featured artists on United States sound recordings. 1Japanese society designated to collect Japan's sound recording rental royalties.
Page 4 AARC is very proud to have negotiated these historic agreements on behalf of featured artists on United States sound recordings, and so to have found new royalty streams for these artists. For rental and home taping royalties due for prior years, AARC will receive several millions of dollars. Going forward, AARC will collect and distribute these royalties annually. AARC will continue its efforts in seeking out additional royalty sources, and protecting its participants' rights in their works. What You Need To Do Next AARC files a claim each year, by the end of February, for royalties collected during the prior year. To ensure that your claim is included in AARC's next AHRA claim, complete a representation agreement(s) ("Featured Recording Artist Authorization Letter" and/or "Copyright Owner Authorization Letter") authorizing AARC to represent you. You should also complete the requisite information forms and return them to us at your earliest convenience. To eliminate the administrative burden that would be associated with renewal of fixed-term authorizations, the term of the agreement is perpetual. However, the agreement may be termination by you at any time – so long as the proper notice is given (see “Authorization Letter”). Upon termination, AARC will continue to represent you only with respect to those claims filed, proceedings or actions commenced, and royalty fees collected from the Copyright Office prior to the effective date of the termination. Please complete and return an executed representation agreement(s) and information forms to us at your earliest convenience. Note that it is the representation agreement that enables AARC to represent you. Therefore, if you require additional time to complete the information forms, send your executed representation agreement to us before completing the information forms. After more than a decade of hard work in securing passage of this legislation, we are committed to ensuring that AHRA functions in a fair, efficient and cost-effective manner. Together, we can make sure that AARC is in the best position to achieve this result. If you have any questions, feel free to contact our office at (202) 775-0101.