Small webcasters paying royalties for playing music on the Internet? Yes, it’s only fair.

World Tech Tribune.com ^ | Copyright 2002 - October 23, 2002 | Scott McCollum

[Scott McCollum]

“However, these small radio stations are often just people with an Internet connection, a computer and a bunch of CDs or pirated MP3s who would rather steal from the rightful copyright owner than adhere to the agreements of civilized society. The four years worth of back royalty payments from webcasters were due on Sunday October 20, 2002 but that was postponed by organizations representing the artists including the Recording Industry Association of America (the RIAA is normally considered the villain in these discussions) and Republican Senator Jesse Helms (who is normally always considered the villain to liberals/leftists) has postponed voting on laws that would protect copyright holders on the Internet until after the November 2002 elections. In an effort to keep legitimate webcasters from going bankrupt, the RIAA has asked that a $2,500 'down payment' be made by webcasters and I predict that those that pay the $2,500 and adhere to the new $0.07 per song royalty payment method will be exempt from paying the tens if not hundreds of thousands of dollars in back royalties owed to the rightful copyright owners.”

[Scott McCollum]

For many pirate radio operators, the free ride on the Internet is coming to an end...

[agitator]

The legitimate business webcasters have never objected to paying ASCAP/BMI extortion fees. By the way, if you think that the artists actually get compensated properly for airplay of their work by ASCAP/BMI, you don't know how that racketeering, shake-down enterprise works. In any event, compensation for artists isn't the question with legitimate webcasting businesses.

The problem with the current situation is that the RIAA is trying to eliminate competition for the over-the-air outlets that they control through a mechanism of third-party payola. They don't like it that their control is being diluted by the fact that webcasters offer more choice to the listener. They're asking that webcasters pay not only the ASCAP/BMI fees, but an ADDITIONAL fee to RIAA which is designed to put webcasters out of business. The webcasters offered to pay a percentage of profit but this wasn't good enough for RIAA because all they want to do is eliminate competition for their controlled outlets.

All of this is based on the premise that webcasters are doing the same thing as mailing CD's with music on them to their listeners - which is ridiculous - rather than doing the same thing that over-the-air broadcasters are doing.

This is nothing but a monopoly operating on a pre-historic business model that refuses to change and prefers to squash its competition.

[Luis Gonzalez]

Troublemaker...

[rockrr]

I was familiar with a couple of web-based "pirate" radio operators. They hosted music that (in their opinion) wasn't receiving much airplay. They derived no income from their program - and in fact lost money. They were, after all, paying for their webspace & bandwidth had purchased virtually all of their material.
The net effect of their programs was to heighten public awareness to the artists featured - no doubt stimulating further interest to hear more from those artists (spelled CD SALES).
They were harassed by RIAA goons, and shut down by court ordered injunctions before the merits of their respective cases were resolved.
They won't be back.
Who is the loser here?

[steve-b]

If you can't get past the broken link to Scotty's blog, here's an explanation of the issue from somebody in the business. Basically, the problem is that the RIAA wants webcasters to pay a much higher rate than incumbent over-the-air stations:

The RIAA concept would hit small enterprising webcasters hard, not to mention that they are being held to a double-standard, since regular broadcasters don't pay the fee at all. RIAA has proposed that those on-air stations that also stream onto the Internet should pay half of the fee they propose for Web-only stations.

[Chancellor Palpatine]

Ahhhhh - another vanity piece by the RIAA lapdog. How much does the RIAA pay you to flack for 'em, Scotty-boy?

[FreedomPoster]

Bingo! bump. The RIAA is out trying to continue a business model (controlling new artists and music via a few very large semi-monopolies) that is being outmoded by the technological advance represented by the Internet.

[WyldKard]

Wow! How long did Hilary "Bride of the Antichrist" Rosen let you remove your tongue from her Prada pumps so you could post that bit of propaganda for her?

[Scott McCollum]

Amazing that anyone pointing out that broadcasting copyrighted music over the Internet is the same as broadcasting over public airwaves must be a "shill."

I urge all the anti-corporation activists to use the vast resources of the Internet to find out why my check from the RIAA hasn't showed up yet.

[mouse_35]

Scott, I do not think that most people on this forum have a problem with internet broadcasters paying the same royalties that are paid by traditional broadcasters. What most of us have a problem with is the internet broadcasters being charged addtional fees. Why should an internet broadcaster be charged more than a traditional broadcaster?

[WyldKard]

Amazing how you fail to address that the RIAA wants to charge online stations for not only playing music that isn't copywrited by the RIAA, but they also want to charge them extra fees that they don't extract from radio stations. Or all the little dirty tricks they try to pull over the years, like trying to make all songs "works for hire" so they don't have to ever give the rights back to their authors...(they almost got away with it, too..)

Face it...the RIAA is not about protecting the rights of the copyright holders...they are about extracting and exploiting their hard work and talent. They are corporate parasites that are abusing the power of law to try and prop up their failing economic model. They are the very ANTITHESIS of Capitalism!!! The whole "Prince Renaming" debacle showed what happens if you try to buck the trend and tell people the truth....

[Scott McCollum]

I'm sure you've all figured out that there's nothing wrong with the link to World Tech Tribune and poor "steve-b" is a jealous, niggling, childish liar.

If he can't get to my column from his ancient computer, he either should email Packard Bell's tech support in Japan or notify the good people at Free Republic.com -- funny how only HE can post a link properly, isn't it?

The bottom line is that according to the US Copyright Laws that are based on the rights afforded by the US Constitution (which most FReepers normally love to quote) the only legal way to reproduce a piece of recorded music -- uploading, downloading, ripping MP3s from a CD, broadcasting to an audience, etc. -- is to get permission from the owners of the copyrights. It's called obtaining a "license" and webcasters are not immune to that law.

[supercat]

Congress does not have blanket authority to pass copyright-style legislation. Its authority is solely to promote the sciences and useful arts by giving authors and inventors, for limited times, the exclusive use of their writings and discoveries.

Much of what the RIAA et al. are trying to use new copyright legislation and regulations to do is to stifle the arts by granting copyrights for what is essentially an infinite duration. I hope the Supreme Court can see this overreach of power for what it is.

[supercat]

The bottom line is that according to the US Copyright Laws that are based on the rights afforded by the US Constitution (which most FReepers normally love to quote) the only legal way to reproduce a piece of recorded music -- uploading, downloading, ripping MP3s from a CD, broadcasting to an audience, etc. -- is to get permission from the owners of the copyrights. It's called obtaining a "license" and webcasters are not immune to that law.

The question is whether webcasters are distributing copies of music or are 'performing' it. Legally, broadcast radio stations are considered to be performing music, not copying it, even if temporary copies of the music are used antecedent to their performance. Copyright law holds that the concept of performance copyright does not apply to phonorecords but does apply to the underlying music thereon.

Still, what is perhaps most perplexing here is why webcasters should be charged more than broadcasters (or especially why they should be charged more than broadcasters who also webcast!--this latter group should, if anything, be charged the most!)

Of course, I think the answer is pretty simple: most broadcast radio stations are either public stations (which get special copyright privileges) or are willing to support the RIAA's agenda. I can see no other explanation.

[supercat]

BTW, many--nearly all--boom boxes include the ability to record radio broadcasts and have included this ability for many years. While the RIAA would be correct in suggesting that it's possible for a listener to record music that comes over a streaming connection, it would be absurd to suggest that people don't do the same thing with radio-tape players, or that they haven't been doing it for decades.

RIAA et al. want to use copyright to stifle the arts. Since Congress' copyright authority is limited to the promotion of the arts, I hope the Supreme Court has the cajones to step in and put a stop to some of this nonsense.

[aruanan]

Small webcasters paying royalties for playing music on the Internet? Yes, it’s only fair.

No, it's the farthest thing from fair, and here's why. Previously, a radio station would pay ASCAP or BMI or one of the others a fixed percentage of the station's total revenue from advertising per year regardless of the number of times the song was played or how many people were estimated to have listened to it. Along comes web radio and downloadable songs. Certain very large companies, TIME/Warner one of them, were afraid that they would be liable for that percentage of their respective company's entire revenue per year, not just that revenue limited to the part of their business devoted to that particular music-related activity. Because of this, these companies got the law written so that they would have to pay only on a per use or per listener basis. This would then be a very small yearly cost compared to a fixed percentage of their revenue. However, it put small web radio stations into the position of having to do something that no broadcast radio station has to do.

So we have the situation where one large broadcast radio station has to pay a few thousand per year for song licensing (a small fraction of its revenue) and one small web radio station would have to pay what would amount to several times its entire operating budget (tens of thousands of dollars)--not its ad revenue--for playing exactly the same songs, exactly the same number of times, over exactly the same period of time. The two activities, differing only in the technology by which the signal is transmitted to the listener, are being subjected to two entirely different methods of calculating payment, one of them being so costly that it is driving small companies out of business. Call this equal protection under the law? I don't. The only justification for it is that a few large corporations think they'll be protected from having to shell out. Meanwhile, many, many small web-radio stations, which could be generating income for the various artists in exactly the same way that broadcast radio stations do, are prevented from doing so. Web-radio stations that are put out of business by a grossly unfair method of calculating payment won't be around to generate revenue.

[aruanan]

See post 16.

[LowOiL]

There goes my awesome new wave nobody ever heard of them but a few of us nuts music. Got a good new source for me to listen too now, seems the music companies don't bother pushing them anymore. BTW. not the top 40 new wave but the underground stuff remixes ect.. Stuff like: Taras Bulba, The Essence, Red Box, The Light, Industry, Captain Sensible, Furniture, China Crisis, Alternative Radio, Altered Images, A Drop in the Grey, BEF, St. Etienne, Kissing the Pink, Illustration, older Runrig, ect...

[supercat]

This would then be a very small yearly cost compared to a fixed percentage of their revenue. However, it put small web radio stations into the position of having to do something that no broadcast radio station has to do.

Interesting notion, though I'm curious how AOL et al. would be able to make any money from webcasting under the terms required by these agreements.

BTW, one thing I would like to see (though of course since RIAA's real goal is to stomp out webcasting we'll never see it) would be a distinction among streaming 'quality' modes. It's plausible that somebody might record a 192kbps stream of a song and use that instead of buying a CD. It's less plausible that someone would capture a streamed 10-second clip of something that's recorded at 24kpbs and listen to that in place of a CD (it's plausible someone might decide on the basis of hearing such a clip that they did or did not want to buy the CD, but if they like the clip possession of clip would not discourage a CD purchase).

[steve-b]

broadcasting copyrighted music over the Internet is the same as broadcasting over public airwaves

I'm glad you understand why the RIAA needs a bitch-slap for its attempt to impose discriminatory rates that penalize the former and subsidize the latter.