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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.
DJ Ari from Digitally Imported has a lot of good information on what it means to the larger of the (still) free stations. They also have some information on what you can do to help them out.
http://www.di.fm/sos.php
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?
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."
... if anyone can answer that for me without being flippant, I'd love it.
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
Have we ever seen any industry at any other time do the same thing?
This will be the end of such wonderful music resources like Groove Salad and Digitally Imported. These two stations are largely responsible for me purchasing any CD's at all last year. I don't like any of the ultra-narrowband content being shoved down commercial radio, I don't listen to it. The only music I purchase comes from college radio and netcasts.
Instead of allowing natural forces to broaden everyone's musical horizons, the RIAA is stifling it back to the 20th century model. If they keep being sucessful in court, the only way to fight them will be to turn music into a grass roots listener supported movement. This can only be done by enabling good musicians to run their own businesses to support themselves. This means being internet-savvy and moving away from standard CD-distribution. It means not signing the deal with the devil and trying to make it on your own with live performances and micropayment downloads.
Sites that facilitate this could act much like record lables in the promotional aspect - they would serve only to group together musicians of common genre. Instead of taking most of the artists' revenues away, they can charge a low, flat listing fee for each artist per month, which in quantity could still be quite profitable for the wise entrepreneur.
It comes down to the fact that 90% of everything is STILL crap, and only the top 10% of musicians will make any real money at it. But it will still be 100X more than what the current RIAA model allows. It will be the breadth of availability, not the quantity of each genre, which will improve.
When art combines with money, it can be a bad thing if not done right. When it is done right, it's a pleasure to make a living doing what you love.
--Mike
A + B = C
A. Net radio plays corporate music
B. People buy corporate music heard on net radio
C. Corporations make more money
Oh wait, that's silly math. Here's how the real world works:
W + Q = Z
W. Corporations charge net radio to play music. Net radio disappears.
Q. Corporations continue to rape musicians up-the-butt with a silver broomstick. Musicians walk kinda funny.
Z. Corporations whine when profits plummet, so they pull politico puppet strings to make tens of millions of Americans criminals and continue to consume corporate welfare and pass more laws to prop up their failed business models.
I'm not sure about other wedcasters, these are just my opinions.
The very idea of having to pay royalties for the songs I play through a web cast is outrageous. I run a shoutcast from my computer, the playlist is managed by my girlfriend. The bitrate is set much lower than cd quality, and is really mostly for her and her friends enjoyment. The thought that the RIAA wants to charge me for broadcasting sub-standard quality music that one could record just as easily from a radio, is absurd. Radio stations broadcast music for several reasons:
1. entertainment. This I would rank as the primary focus of radio stations... people want to be entertained, and the less it costs them, the better.
2. To promote the artists. Lets face it, without radio stations and music video channels, most people would never buy the albums from the local music store. We hear a song that we like, find out who its by, and buy the album. I don't believe I have ever heard of somebody going into a music store and picking a random album and buying it because they thought it looked interesting. The music industry just doesn't work that way.
Why should I have to pay the music industry to entertain there fans, and to promote there music? When was the last time you heard ANY company complain about free advertising?
I could see the headlines now: "Microsoft Sues small-town software company for promoting microsoft software." This doesn't make sense, and neither does royalties on webcasts. Forcing webcasters to pay a royalty on a webcast is like making them pay the RIAA to promote the RIAA's product.
There is no piracy involved in this. There is no music bootlegging, or recording and any such thing. If the webcast listeners want to record and distribute illegal copy's of 24kbs, 22.05kHz, Mono music, by all means, let them. But do not make the webcasters pay for this. We want to entertain, and we want to promote our favourite artists. This is all, and the only fee we should have to pay, is the fee to obtain legal copy's of the music to begin with. This would merely involve taking a trip to our local music store, and purchasing a copy of the artists album.
Thomas A. Knight
Author of The Time Weaver
I wonder what the founding fathers would have thought of these guys taking copyright to such an extreme that it threatens the usability of new technology.
Engineers have taken the time to create, patent and license technology to stream audio over the web. Now, copyright holders of the audio content are trying to price content so high that the use of the patented invention becomes infeasible.
I would think that copyright was never intended to be a weapon to strangle invention.
Just my $.02. Keep the change.
Some people have a way with words, and some people, um, thingy.
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.
For every complex problem there is an answer that is clear, simple, and wrong. -- H L Mencken
Ok, so the current rate for over-the-air broadcasters is $0.0022 per listening hour . Or assuming 4 and a half minutes per song,
.0165 cents per person per song. And they want webcasters to pay .14 cents per song. What the hell are they thinking?
$0.0022 / ( 60 / 4.5) = $0.000165
or
The people on the panel must have invested money at the height of the dot-com boom and figured it was payback time....
Could webcasters negotiate their own royalty structure with independent bands? Sure you're getting a mixed bag when you do that, but a lot of the local bands I've taken in in various cities have really good stuff. Why not just tell the RIAA to get bent and only do business with musicians who aren't owned by "The Man"?
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Wouldn't it be wonderful if the RIAA priced their homogenized crap out of the broadcast market?
"Hello, Listeners! Tonight I'm playing an album by a very talented group you haven't heard of yet. They haven't signed a deal with the RIAA, so we can afford to play their music."
"Those of you who called in requests for Destiny's Child and N'Sync, sorry! We can't afford to play that shit anymore!"
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
What exactly has been done to define "webcasting?" The very term seems completely outdated. No one uses the "web" (HTTP) to deliver music any more. So what is the difference between webcasting and standard radio? Let's examine.
Is it having a web page? Of course not. Regular radio stations have web pages, same as webcasters. So clearly the web page itself is not the key factor.
Is it being digital? I don't think so. Consider the new XM satellite radio systems as well as small regionalized experiments with digital radio transmissions. Yet these would seem to be considered closer to tranitional radio than webcasting.
Is it being interactive? This is a big issue for the record companies...but how much control is required before something is interactive? Almost every radio station lets you e-mail song requests. So then, if a "webcaster" used the same mechanism, and disable any form of direct control, wouldn't they fall under the same category as radio stations?
Is it the content delivery mechanism? Consider the hypothetical situation where my computer has an FM radio card. Clicking on a link tunes my radio card to a radio station playing the song I want. Now I'm doing something interactive, web-based, and on-demand...everything that would seem to point to it being a webcaster, but since the music is coming in over standard radio waves, is it?
All of this brings me to my idea...let's grow 802.11 wireless networks specifically for broadcasting music. We aren't webcasting, it's radio wave transmission...same as regular radio stations. The 802.11 spectrum is licensed by the FCC, same as regular radio station.
Then once we are all broadcasting music via radio waves in our localized region, let's join the NAB and pay the same low royalties as regular radio stations. Could they stop us? What could they use to draw a distinction between one form of radio wave carrying music and another?
- JoeShmoe
.
-- I wonder which will go down in history as the bigger failure: the War on Drugs or the War on Filesharing
That argument is libertarian bullshit that's totally ignorant of history.
Right! America doesn't even have royalty.
Oh. Oh, I see...
"Goodness me, how unlike the FBI to abuse the trust of the American public." -- The Onion
As one industry website points out,
The myth of the "perfect digital copy" is just that -- a myth. This should be the heart of the attack. The argument that current royalty rates would put Internet radio out of business is irrelevent if you accept the claim that Internet radio is threatening to put the recording industry (a much larger industry) out of business.On the other hand, try this on for size.
-
Find a reasonably good quality net broadcaster.
- Make a copy of a good song off of that net cast.
- Make a copy of that same song off of the radio
-
Play back an original CD of the sound, followed by the netcast, and then the radio copy.
-
notice which is the best, and which is the worst.
Although a 'perfect' copy of a CD is possible, it takes 300Kbits to do so. A 128Kbit MP3 is good, but I can tell the difference between a CD and an MP3 when played on my rommate's (MP3 CD capable) car stereo.Internet radion, on the other hand, rarely reaches those rates. looking at the Real audio's tuner page shows 3 station:
KASR FM Radio (sports) broadcasts at 20Kbits/second (I'd describe it as grotty)
Euromix Radio(" Pop to house, trance, techno and energy remixes from DJ Daizzy, ToolMix, Terry Tate and..") broadcasts at 32K bits/second. This is actually better quality than many netcasters, but you can definitely tell that it's a net cast. even with pure voice content in a language I can't understand. KASR radio (specializing in classical music, and thus a good representative of the "high end" of the quality scale) broadcasts at 64Kbits/second. Decent quality, but -- at 6:30AM, on a Sunday -- they're at their audience limit. I can still hear the bite of audio compression (when I can reach them). --- In fact, they're not up to the quality of AM radio -- much less FM.
Going to their search listing for "Seattle", (where Real Audio is based) shows stations rangingr from 20K bps up to 96K for Groove Radio (split between audio and video). I actually found a listing for a Chicago station that claimed 256K/sec, but I couldn't get to them. (I'm guessing that they're also a video/audio mix).
When I worked at GlobalMedia.com (now defunct), we had people who could squeeze the last bit of quality out of a 64K audio stream... (some webcasters don't quite understand what the issues are for getting a decent quality webcast). Even so, the quality never stood up to broadcast radio -- much less the CD player on my computer going through my (25 year old) receiver.
-----
Once you debunk the 'perfect digital copy' myth, then you can get on to the question of what's a resonable royalty rate, as opposed to what would compensate the RIAA for their supposed loss of business.
Sometimes boldness is in fashion. Sometimes only the brave will be bold.
Judges know when they've made a good ruling if both parties are unhappy. ;-)
-Adam