Universal's MP3.com Clone Loses in Court

erc writes: "According to this article, Universal Music Group's Farmclub.com online music service streamed songs without obtaining licenses from music publishers. According to the Court, Universal must obtain separate licenses for songs it wants to distribute over the net. Turn about, fair play!" Well, the courts are fairly consistent - if you don't have licenses from everyone and their brother, you can't play music online.

Comments

Dear Universal: Be careful what you wish for.

[Travoltus]

If this company is illegally streaming copyrighted music, I wonder how many others are.

At least the courts sent a message saying the almighty big corporations can't violate the law. It's kind of funny that they're tripping on their own shoe laces. (See: the lawsuit this company launched against mp3.com)

It's going to be quite interesting to see the repercussions as Universal tries to appeal this ruling... in effect, they're saying, "We can e-broadcast copyrighted works without paying a license, but we'll put any citizen who does it, behind bars, forever!"

And I wonder how much all these licenses will cost Universal Music Group. Maybe it will be so prohibitively high that they'll start wanting to nix the law in Congress :)

Note to Universal: "Be careful what you wish for." - Wishmaster

A deeper problem with the music industry...

[Masem]

Note that this case involved the publishers & songwriters (as represented by the NMPA), as opposed to Universal's rivals in the RIAA distribution group. This is similar to the recent Napster story in that they have agreed to terms for NMPA, but not yet to RIAA.

Throughout all these talks and other stories, we're seeing a bigger problem in the music industry that relates to copyrights and royalities; namely, that for any one song, there are 3 people and/or groups that can claim some form of ownership on it, legally or ethically. These are the performers themselves, the distributors that typically own the copyrights on the performce over the performers, and the publishers and songwriters that typically own the copyrights on the lyrics and sheet music but not the performance itself.

Too many cooks can easily spoil the broth.

This is why I think indy artists are gaining more and more attention. First, they typically are their own performers and publishers, which means they at least own the copyright on the lyrics and music. Secondly, most indy labels have much more lax contracts in that the label itself doesn't own the copyright on the performed work, and it is still held by the indy group. These situations allow the indy group to have full control on how to distribute and publish their work. And most good indy groups appear to understand that if they write good songs and yet release some of their works on the net, they will still take in a modest profit from touring and CD sales with the increase in their fan base. Only with that amount of control can situations like that happen.

If there is any other group beyond the performaces that are trying to get their hands in the honeypot as well, then all bets are off for strong control of distribution of their works.

This situation also calls for the development of music 'publishers' that are basically people that can help to press and burn CDs, and get them into distribution channel, but otherwise do nothing else with copyright, much like how people can get custom T-shirts made in large quantities; the t-shirt shop owns none of the copyrights on any logos or sayings, only does the job they are paid for. A shop that could offer a band to print, for example, a buck a copy for each CD, with $.10 being a profit for the shop, the rest into materials, operation, and distribution, could easily win out in such a situation. I'd also expect the shop to collect royalities, but again, most of these would go back to the band, the shop maybe taking only 10% of that as well.

Hopefully, more bands in the future will see that going indy, or at least staying away from RIAA, will earn them not only more respect from their fans, but possibly more money than they would have seen from signing with RIAA.

In defense of /.

[pagsz]

The decision is good for two reasons:

1. It establishes a level playing field. Big studios like Universal have to go through the same legal hoops as everyone else. From the article: "'This decision means record companies aren't in total control of how music will be exploited on the Net,' said Whitney Broussard, a music lawyer at Selverne Mandelbaum & Mintz. 'They are going to be on the same footing as other Webcasters, and they will have to negotiate publishing rights as well.'
   
2. Universal is being hung up, as it were, by its own petard. The same legal hurdles that hurt MP3.com and Napster apply to Universal. From the article: "Like Napster's service, the labels' offerings must win publishers' go-ahead if they are to avoid legal disputes." Also from the article: "Universal spokesman Bob Bernstein said the company 'disagrees with the court's opinion, and we intend to appeal.'"
   So, what does this mean, you ask? If Universal wins, the rules are rolled back and sites like MP3.com can go back to business without interference from the big boys. If they lose, they are forced into, gasp, fair market practices.

This isn't about taking a shot at a big company. It's about the rules being the same for everyone, and big studios not getting any extra help from the courts. So /. is being consistent. Consistently in favor of fair trade, with the big companies getting no more breaks than the small.

Consistently stupid,

On MP3 streaming...

[bacchusrx]

MP3 streaming isn't so controversial, really. In fact, it's not very difficult--nor very expensive--to get the appropriate licenses to broadcast music (legally) on the Internet.

The problem lies in the fine line between distribution and broadcast. When you distribute an MP3 online, you run the risk of violating the distributor's copyright to the actual CD medium. So, if that MP3 happens to be of a song by Metallica, and you don't have permission from the recording company, or its agent, you've violated copyright law for duplicating the CD (or a portion of it).

On the other hand, when you stream an MP3 online, you're broadcasting it. Broadcast isn't distribution, it's public performance. Public performance rights belong to the songwriters. If you broadcast that Metallica MP3 without permission from artist, or from one of the appropriate songwriter's associations, you've violated copyright law.

Thankfully, getting permission from the songwriter's associations--that's ASCAP, BMI and SESAC--is a piece of cake. The licensing rate depends on a number of factors -- available here, here and here -- but for the most part, for small internet broadcasters the fees are minimal. ASCAP charges about $250 a year to start... BMI is more expensive, SESAC is considerably less (something like $50 or $75 annually.)

The United States has additional rules for online broadcasters that don't apply to airwave broadcasters. For instance, you can't provide music on-demand... you can't announce your playlist in advance... and you can't play too many songs from the same artist/album in a row. Nor can your playlist repeat predictably or too frequently.

Other countries have less restrictive rules.

Where things get messy is where you start to provide audio on-demand, or whenever audio is made available for download. In those cases, distribution rights apply as well as (or instead of) public performance rights...

BRx.

Re:It's only but fair

[gorilla]

Music has copyright on it. Get used to it. How would you feel if you produced a hit one day, it's played everywhere, but instead of a lot of money, you only receive a few pats on the back?

That's exactly what's happening to the artists.