Webcasters and Record Industry Both Appeal Royalty Ruling

jonesvery writes: "Both Webcasters and record companies are appealing the proposed royalty structure suggested by an arbitration panel, according to this LA Times story. It should surprise no one that the Webcasters feel that the proposed royalties are absurdly high, while the record companies wants them to be higher -- at levels set in independent deals negotiated between the RIAA and a couple of dozen companies. The fact that many of the companies that made these independent deals with the RIAA couldn't make enough money to both pay the royalties and stay in business doesn't seem to worry the record companies much. Funny, that..." We did an earlier story about the royalty ruling. The internet radio community seems to be just a bit upset about the whole thing.

Comments

Re:enforcement

[dirk]

The fees under protest by both parties are:
The fee is $1.40 per thousand listeners for Internet-only stations, and 70 cents per thousand listeners for over-the-air stations that simultaneously broadcast online.

How would the record companies enforce such a payment structure? It seems to me that would be no method of counting the listeners that couldn't possibly be altered by the webcasters especially with all the different webcasting programs out there. Does anyone have a clue how the Record Companies were planning to accurately count listeners?

FOr non-commercial stations, I don't know how they would accurately count it. For commercial stations, it would be easy, the station would do it for them. The station is going to keep an accurate count of listeners (or even an inflated count) because that is what they use to price and sell advertising time. So if they keep these stats already, that is what the recording industry will use to charge them.

Killing the Business

[pgrote]

This quote from the article says it all, "The rates should be closer to the deals negotiated between the RIAA and more than two dozen companies, RIAA attorney Steve Marks said, even though many of those companies are no longer Webcasting or even in business."

Did I miss something?

Wouldn't you want to partner with those who are distributing your product to ensure your revenue is generated? If you price your product too high you cease to get ANY revenue at all. Period.

What is going on? Why is the RIAA hellbent on staying in the 20th century? Seriously ... if anyone can answer that for me without being flippant, I'd love it.

Have we ever seen any industry at any other time do the same thing?

Re:Killing the Business

[gilroy]

Blockquoth the poster:

What is going on? Why is the RIAA hellbent on staying in the 20th century? Seriously ... if anyone can answer that for me without being flippant, I'd love it.

I would think that this is obvious: The RIAA wants unshared control of the music industry. Are they opposed to downloading songs? Not at all -- witness PressPlay and such. They are of course opposed to anyone else having a say in downloading songs.

I imagine it's something similar here. They like Internet streaming but don't like the idea of small, free stations providing it. They can set the rates high enough to drive out every competitor. Don't be surprised in a year or two if you see RIAA-supported "Internet radio", wherein the major labels make sweatheart deals with one another to get around the exorbiant fees they'll charge every else.

Once more, with feeling, from Cosmo of Sneakers:

There's a war out there, old friend. A world war. And it's not about who's got the most bullets. It's about who controls the information. What we see and hear, how we work, what we think... it's all about the information!

Compulsary licensing

[coyote-san]

That argument is libertarian bullshit that's totally ignorant of history.

The record industry has historically abused its monopoly power at every chance it had. It's happening today, it happened when radio stations first became common, and it happened when phonographs where first introduced. (Did you know that early phonographs could only be legally played on some phonograph players (those who paid the bribes to the copyright holders), and the records could never be loaned, sold, etc.)

The abuse was so bad that Congress made an exemption for phonographic copyrights, and phonographi copyrights alone. ANYONE can produce and sell a compilation CD of ANYTHING, and the copyright owner can't do anything to stop it as long as the compilation producer pays a modest compulsary licensing fee set by statute. Likewise radio stations and other commercial users can pay a compulsary licensing fee and tell the RIAA representative to get lost when they try to force the station to pay more, or change the presentation, or whatever.

On the one hand I'm surprised that the RIAA is trying this same shit once again. The public may not be aware of its sordid history, but the industry lawyers and regulators certainly are and there is absolutely no chance that compulsary licensing will be enacted for webcasts. The only question is the amount charged... and this proposal is *way* too high, and the burden to documenting individual users is far too high. In particular I remember that small college radio station example - the numbers were so high that I think it would be cheaper for the station to pay the compulsary licensing fee and distribute free CDs containing their entire playlist to every student than it would be to operate the webcast for a few weeks!

On the other hand, there's a libertarian born every second. Libertarian principles aren't bad, but most libertarians have a big blind spot when it comes to the fact that there are some "bad players" who have a CENTURY (or more) of demonstrated history abusing the rights of others whenever they have half a chance. Only the government is able to stop this abuse - individuals and smaller companies simply don't have the resources to fight them.