Senate Committee Holds Webcasting Hearing

jonathanjo writes "Yesterday (5/15/02) the US Senate Judiciary Committee held a hearing titled: "Copyright Royalties: Where is the Right Spot On The Dial For Webcasting." This was a review of the work of CARP, the Copyright Arbitration Royalty Panel, the group formed by the DMCA that has closed down webstreaming for many independent radio stations with new high fees and exhaustive reporting requirements. Representatives from RIAA, Digital Media Association, Arbitron, Real Networks, and Yahoo gave testimony, as well as people representing two independent Vermont webcasters, and the American Federation Of Television and Radio Artists. Senator Patrick Leahy's (D-VT) testimony was surprisingly sympathetic to small webcasters (especially by inviting two from his state to speak). Orrin Hatch gave the expected pro-DMCA boilerplate."

Comments

From Leahy's Speech:

[thesolo]

The Librarian of Congress can do three things. He could approve the decision, which nobody seems to like.

You know, I'm glad someone said it...

The best thing the Librarian of Congress could do would be to reject the proprosal, and then deal with the inevitable appeals in Federal Court from the RIAA. Let's all keep our fingers crossed. (when they aren't busy dialing our Congressmen!)

Save Internet Radio

[commodoresloat]

KCRW, an LA NPR station, has been playing PSAs about this. They have a great page with a sample letter to your Congresscritter. And be sure to check out SaveInternetRadio.org. This is something the average non-slashdot-reader can understand far more than they can or will bother to comprehend DMCA, SSSCA, or the Russian who wrote software that let people read books, so there is a slight chance that the forces of ignorance won't take this round.

Re:Save Internet Radio

[56ker]

and for those who don't know - PSAs are Public Service Announcements.

Orrin Hatch?

[tps12]

I thought we liked Orrin Hatch? Now he's a bad guy? Damn.

Re:Orrin Hatch?

[Anonymous Coward]

I don't know who to like in Congress anymore. When it comes to the music and entertainment industries it seems that both the Republicans and the Democrats have had their palms equally greased by the lobbyists. The corruption and lobbying virtually extinguishes the will of the people. With the entertainment industry in one corner it becomes even worse. They have the power to influence what the masses see in the media and can sway their opinions.

People exchanging music suddenly became hardened criminals sitting in the darkness behind a computer screen plotting the overthrow of the capitalist recording companies. The way these revolutionaries are potrayed I'm not sure what I'd do if I ever met one in a dark alley. Would I run? Would I be afraid of this dark nemesis of intellectual property rights? Are they the spawn of evil that the RIAA and MPAA has made people out to be? What about all the flagrant copyright violators who buy VCRs and tape programs for their personal archive of movies and shows they like? Do these people walk the dark path of corruption? How can we return these souls to the light?

Case in point: I was listening to Opie and Anthony a few days ago and they had some joker from Metallica on. Normally I would change the channel since the group sucks and I have boycotted them anyway, but I found it intriguing what he was saying. He actually said it was sharing to send out tapes to 2000 of your friends.. that's fine. If you put it on the Internet however that is "stealing" (in his words). Where is the point of no return? I can give away your music for free as long as I get to know the people? How about if I'm swapping mp3 collections with friends from IRC? Is that fine? Where does the line get drawn? These luddites will eventually get old and die away, but hopefully they won't have a chance to corrupt musicians from the next generation who must understand they need to embrace technology and not shun it to succeed.

Wow, they actually invited the other guys

[Quila]

You'd think this would be like Hollings' SSSCA where he really only invited the *AAs to testify, with one token technology person to abuse in front of them ("yes massas, isa earning my payoffs"). Instead they're actually inviting many concerned parties from all sides.

Cool, something good may actually come of this.

This is a result of poltical pressure...

[mbone]

This is a direct result of poltical pressure from small webcasters, and shows that the system does respond to such pressure.

Last Thursday, before the Roundtable at the Library of Congress on the CARP recordkeeping rules, there was a "Hill Walk" organized by Kevin Shively of Beethoven.com and other small webcasters, who went to the Capitol and meet with legislators and their staffers to explain their position. Earlier, on May 1, the same group organized the "day of silence" on Internet radio, to show the result if the situation wasn't changed. This hearing was one result from this politcal campaign.

More information about this grass-roots effort can be found at SaveInternetRadio.com, and some of the best coverage is in the Radio and Internet Newsletter.

Info Galor!

[mattyohe]

http://www.rice.edu/cb/sos/ -- Information pertaining to the effect of the CARP recomendations upon non-commerical radio stations.

http://www.kurthanson.com/ -- RAIN is a trade publication for the Internet Radio industry. This is an excellent site to keep tabs on how the campaign is going to stop these fees and reporting requirements.

http://broadcastpromotions.net/carp/ -- This site allows you to send faxes through their web site and directly to the person in Washington that you should be bugging.

The CARP proposal, if passed, will take effect on or about May 21, 2002.

Sen. Hatch

[hostage89]

Did anybody else notice how much Sen. Hatch talked about his own singing experiences? Maybe that his how the RIAA has bought off these committees, by offering them an album?

Tides of changes

[BobSutan]

Perhaps its time for a new industry association to pick up the reigns the RIAA dropped? How about a new entity that's tech friendly who could sign new artists (its not impossible)? I'm sure most musicians wouldn't mind having new revenue streams to tap, its just more money in their pockets. All I'm saying is I wouldn't mind seeing someone defending the artists that had a clue and wasn't refusing to face the tides of change. By properly paying the artists the money they are due, and selling CDs at a decent price, online distribution could more than easily make up the slack of the lower prices/reduced profits that the RIAA has in place now. Online distribution/radio HAS to be cheaper than retail channels. Common sense says so. All that would really be needed is to sign the new acts the RIAA would like and slowly convert the currently popular ones. Who in their right mind would stay with the RIAA backed companies if they can see the greener side of the fence? (pun intended)

Re:Tides of changes

[e-gold]

I've been saying the same thing (with maybe some gold instead of just green) for years...Artists may say that they like to experiment, and some experiment musically but the entire music business is rather conservative when it comes to circumventing the "ok, how do I get paid for this stuff" bottleneck that's currently controlled by the RIAA, or even thinking about circumventing it. If they could eliminate the bottleneck between consumers with money and artists (and I'd love to help, because being a middleman is quite profitable even if you DON'T grab more than 90% of the loot!) there's no real need for another entity (especially another large one!).

There are plenty of possible revenue streams out there for those willing to think about the problem. Courtney Love's making plenty of lawyers a lot richer, but "sue the record company" as a business-model is not going to get her any more income. The RIAA's generals want to fight the war-before-last, and musicians will eventually find out the hard way how dumb that is, IMO...
JMR
(These opinions are SOLELY mine, nobody else seems to want 'em anyway.)

Re:Tides of changes

[Brootal]

"I'm sure most musicians wouldn't mind having new revenue streams to tap, its just more money in their pockets."

Unfortunately, however well-intentioned the thought is, the reality is that most musicians would not realize any additional income, unless you have change for a penny. How much do you think consumers are going to pay either directly or indirectly? Divide that by the number of artists who will think they are entitled to be paid. Small number. Very.

Such a company would be faced with the same (greater?) obstacles as ASCAP/BMI/SESAC with respect to radioplay.

"Online distribution/radio HAS to be cheaper than retail channels. Common sense says so."

How so? Sure, the raw cost of goods sold is cheaper (i.e. little or no manufacturing costs), but why would the promotional costs (to both radio and retail) necessarilly be cheaper online? If anything, such costs might actually be significantly greater given the relatively much smaller barrier to entry for the hacks. IT is not cheap to rise above the din of background noise.

If the solutions were so self-evident, I am sure somebody would have successfully exploited them.

Brootal

Re:Tides of changes

[4of12]

You have very good points and I agree with them.

What I fear, however, is that it will be difficult to enlist established artists that have been accustomed to feeding at the trough that RIAA has created. No matter that the signed artist only gets a small fraction of what the recording label collects, the total price of a CD tells you in no uncertain terms that the old distribution network was raping the consumer for profit margins far beyond what the media itself cost. (I know, I know, they'll tell me that advertisements aren't cheap, but I won't buy that line all the way to the bank.)

I think there's a good analogy to be made with alcohol and tobacco distribution. Those products command premiums due to taxes and various other restrictions on their sale and distribution. But, if you've noticed, if those extra costs get to a certain point above what they can be made for, then people will seek to circumvent the distribution network, buy cigarettes on a reservation or in North Carolina, etc.

By virtue of the Internet, the cost of making and distributing music has decreased drastically below the CD model. Old artists, accustomed to getting several million dollars from the recording labels, won't want to participate in the new scheme unless the old scheme dries up.

What really needs to be done is for new artists to be enlisted in an Internet distribution scheme that actually makes them some money. That's all.

Re:Tides of changes

[thogard]

The reality is there are too many musicians compared to the current market which is based on moving small plastic discs through stores.

Years ago it required quite a few people and lots of money to put together a record. Now anyone can put together something that has a good sound if they have talent.

I don't think the RIAA represents anywhere close to 90% of the artists out there. For example there are about 3000 bands in Melbourne Austraila that can put together an album per year (according to entries from a local radio station). If the US has as many bands/person there should be nearly 300,000 bands that produce at least one album per year. Consider that people like Bing Crosby made nearly 33 songs per year and popular bands tend to record 8 to 16 songs a year. So how do I get access to thouse 2.5 million songs that were recorded last year? Current album sales in the US are around 3/4 billion units per year but most of thouse are the top 40 albums.

Compelling testimony from Arbitron

[robkill]

Bill Rose from Arbitron had excellent analysis of the cost of the current CARP proposal. (paraphrased below)

If a top-rated radio station in NY had an online listening audience the size of their on-air audience, they would pay $15 million in license fees, or over 25% of their advertising revenue. Similarly, for the entire radio industry, the cost would be $2.4 billion, or %13 of total revenue.

He plainly states that most existing radio stations could not afford to webcast under those conditions, much less any Internet-only stations, whose costs would be double that amount. He even covers the variety of music that is not available on commercial radio that would not be broadcast if web radio were to disappear. If this doesn't convince the Libarian of Congress that the CARP royalty rates are way out of line, then nothing will.

The root of the problem is obvious

[kryzx]

I mean, really, if Supreme Chancellor Valorum had not been forced out by the Vote of No Confidence that Senator Palpatine talked Queen Amidala into calling for, the Trade Federation never would have been able to get this oppresive, freedom-crushing legislation through the Senate.

KPIG

[snarfer]

To really understand this, and to hear for yourself the difference between a great station and the canned corporate crap we get on most FM stations now, check out KPIG. They play such a variety of music, and the manager requires them to play NOTHING that is top 40. KPIG is at http://www.kpig.com.

Contact your Senator and Congressperson

[snarfer]

I always like to point out that you can actually help do something about this. Contact your Senator and Member of Congress. IT WORKS. The more they hear from people onm an issue the more seriously they take it. Go here: http://capwiz.com/nyt/dbq/officials/. Type in your zip code to see who to contact. It makes a difference. Try it.

Ok... this is bad...

[Restil]

I just get done reading "The case for the Empire" and I took at the headline of this article and when I see the word "Senate" I immediately think of the Starwars Republic senate, not our own. I
think I've had enough starwars now, time to return to reality. :)

-Restil

More interesting than this specific debate...

[itsjpr]

It's interesting that "they" are listening. Why?

This doesn't necessarily mean that the politicians personally care about this issue. It is more likely to mean that we are seeing the birth of politics on the Internet. The independents are gaining a voice because they are more effectively rallying support for thier cause than the traditional lobbiests.

I'm happy about this.

What I'm not happy about is that once this process is understood by the majors, the same folks we dislike because they shut us out of pollitical processes today will be the ones controlling the debate on the Internet.

Be aware of this.

Why is music a special case?

[Sloppy]

We don't have "compulsory licenses" for novels, poetry, software, etc, do we? Yet somehow broadcasters (whether radio waves or internet, I don't care) think they should be allowed to get licenses to redistribute whatever they want to, without having to negotiate terms or jump through any hoops.

Can someone explain to me why music is different? Are music broadcasters abusing the system or are people who want to share other non-music copyrightable stuff getting screwed?

I wonder what some people around here would think, if Microsoft wanted to share your software with (sell your stuff to) their customers, by paying a small fee for a compulsory license instead of having to agree to terms of your choosing, such as those in the GPL.

Amateurs and Professionals

[Our Man In Redmond]

If you decide to put on a play covered by a publisher like Samuel French or Dramatists Play Service, your royalties will vary depending on whether your group is professional or amateur. Usually the amateur rate is fixed and fairly nominal -- $50 per performance is what I'm remembering -- and the professional rate most likely depends on the size of the theater and the intended run of the play. (You have to get a rate quote from the publisher for professional performances, something I've never done.)

So, why not base Internet royalties on the size of the audience, or perhaps the number of simultaneous streams a broadcaster can handle?

This would allow the larger broadcasters to pay the larger royalties and hopefully allow the hobbyists to pursue their hobby without it bankrupting them.

Surely the RIAA must realize that they can make more money from small payments from a lot of source than from big payments from two or three sources. Unless this is all about power, which is entirely possible, in which case nothing short of shutting down everyone who isn't buddy-buddy with them will make them happy.

Re:Certainly an appropriate acronym

[TheAwfulTruth]

Why didn't they choose "CRAP", the Copyright Roalty Arbitration Panel? That's better english...

Re:Certainly an appropriate acronym

[TheAwfulTruth]

Er, though not better spelling :)

Number of comments on this issue is telling.

[ElBeano]

I find it interesting that this story has generated so few comments. Apparently, there is little interest in the political process that will actually determine the balance of rights moving ahead. I guess many would rather complain after the decisions are already made.

You can make a difference

[Old time hacker]

When the CARP issue first came up, I actually took action and wrote a set of comments to the LOC on the issue. Given the amount of publicity about this issue, I was suprised by the small number (39) of comments received by the LOC.

This note really indicates that you can make a difference -- if only you take action. Bear in mind that some/most/all Slashdotters know more about the reality of internet radio than the LOC. This is probably also the case for most highly technical issues.

You will have to guess which of the 39 commenters I am, but I note with some satisfaction that the reply comments from the RIAA indicated that they read my initial comments, and they couldn't figure out how to respond to one of the issues raised.

Time for us to do something...

[Loki_1929]

Ok, I think we should all stop complaining and whining and put our money where our mouths are. The RIAA and MPAA have a ton of money to throw at these guys, but there's one thing they want more than money; and that's re-election. Why? It means more money in the end. Now I have an idea on how to do this, and I think we can fairly easily make it work. Please at least hear me out if you care enough to have read this far:

A small lobbying group forms to represent the interests of the consumer against the major media companies and their representatives (RIAA/MPAA/etc). Everyone who can sends in at least $10 or so by check, money order, cash, whatever. Assuming we get no other funding and no one sends more than $10, we should end up with roughly $1million in total. (assuming not even half of the slashdot readers send in). Obviously, this is nothing compared to the 60 and 70 million dollars that the entertainment industry puts in the pockets of politicians, so we take a more targeted approach. We pick the most vocal ally of anti-consumer/pro-entertainment industry legislation (offhand, I'd say Hollings) and target their constituents with ads all over the TV and radio. Every dirty trick and rotten bill he puts forth, we sensationalize the hell out of it, then put it right in front of the people deciding whether they're re-elected. ("Your senator wants to make sure you can't even listen to your own CD on your computer!" .. "Your senator wants to put you in JAIL for taping your favorite TV show!") We make an example out of 1 or 2 and the rest start wondering if they're next. They then weaken or withdraw their support for the entertainment industry and we start getting what we want for a change.

That's my basic idea, if anyone wants to refine it, post a reply. This is a real way we can get something done for a change, and a small amount of money put forth isn't going to kill any of us. Even if it fails completely, you're out $10; so what? If it succeeds, you'll have been a part of something great. Anyone feel like putting together a full proposal with a timetable and tangeable steps at putting this in place? Feel free to post. This isn't just a US problem, the world needs to wake up from this dream that a corrupt entertainment industry can have its problems solved by legislating away rights supposedly guarenteed to us. It's time we did something about it.