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Small Webcasters Sue RIAA
killthiskid writes "The Webcaster Alliance, a small group of 198 webcasters has sued the RIAA. CNET has the news, along with a growing number of other sites (google news). As many /.'ers know, in 2002 the Library of Congress decided on .07 cents per song (retroactive to '98). After that another bill was passed to protect smaller webcasters. Aparently, many webcasters are still not happy." Their complaint is online.
Keep the conglomerates and lawyers tied up forever. The rest of us can be free and happy.
You think that I'm crazy, you should see this guy!
According to this article, the group is actually closer to 400 members, but I'm inclined to trust CNet. Regardless, most are apparently one-man operations and the like; their chances of winning--let alone having the courts "block the major record labels from enforcing their otherwise legitimate intellectual property rights in sound recordings until the alleged violations are remedied" (according to the above atnewyork article)--are, I'd say, slim to none.
how do you determine when you are listening to somone's intellectual property and when you are listening to someone's free speech?
Big Brother Bush is doubleplus ungood.
alleging that the trade association tried to push independent music stations offline. The way the law is currently, you have to pay if you are going to make music publically available. Now this law is insanely out of touch with the way people use media right now, and it needs to be changed, but unfortunately, the evil RIAA was just doing what it was supposed to do. It sucks, but its true.
My user number is prime. Is yours?
Correct me if I am wrong. But don't the music labels own the rights to the songs, not the RIAA? The RIAA just represents them.
Now that's quality legislation.
Buy the President
COMPLAINT
Perry J. Narancic, SBN 206820 LEXANALYTICA, P. C.
160 West Santa Clara Street Suite 1100
San Jose, CA 95113 Tel: 650-814-7688
Fax: 650-618-2700
Attorneys for Plaintiff WEBCASTER ALLIANCE, INC.
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
Webcaster Alliance, Inc.
Plaintiff,
v.
Recording Industry Association of America, Inc., Universal Music Group, Inc., Warner Music Group,
Inc., Bertelsmann Music Group, Inc., Sony Music Entertainment, Inc., Capitol-EMI Music, Inc.
Defendants.
) )
) )
) )
) )
) )
Case No.:
COMPLAINT
(1) Unlawful restraint of trade in the market for domestically copyrighted
sound recordings (Sherman Act § 1)
(2) Illegal maintenance of monopoly in the market for domestically copyrighted
sound recordings (Sherman Act § 2)
Demand for Jury Trial
Plaintiff alleges as follows:
I. NATURE OF PROCEEDINGS
1. This is an action brought under the antitrust laws of the United States to restrain
anticompetitive conduct by the Defendants which threatens to injure Plaintiff and its members as
a result of Defendants' exclusionary conduct in the markets for domestically copyrighted sound
recordings and Internet distribution of such sound recordings.
2. Plaintiff is a trade association whose members are engaged in the business of
Internet radio, also known as webcasting. Webcasting is the Internet equivalent of terrestrial radio 1
2 COMPLAINT
whereby digital data is transmitted in real-time, without downloading any physical files. But
unlike the broadcasting of signals in traditional radio, Internet radio involves the transmission of
streams of data to an individual listener.
3. Internet radio is a vital form of media that allows ordinary individuals to transmit
ideas, music, opinions and other content to an international audience. Like traditional terrestrial
radio, Internet radio is an important medium that allows for the free expression of ideas, news and
opinion. However, the commercial success of Internet radio as a viable line of commerce is
dependent on securing access to suitable content, which is subject to the intellectual property
rights of its owners.
4. To allow for the growth of this medium, Congress enacted the Digital Millennium
Copyright Act of 1998 (" DMCA") to provide certain non-subscription Internet radio stations
with a compulsory license to perform copyrighted sound recordings. Under the DMCA, the
royalty rates for such compulsory licenses can be established by either a voluntary agreement, or
failing such voluntary agreement, the Copyright Office may initiate a Copyright Arbitration
Royalty Panel (" CARP") in order to establish such rates.
5. A CARP proceeding commenced in April 2001 to establish royalty rates for Internet
radio for the period October 28, 1998 - December 31, 2002 (the "CARP")
6. The Recording Industry Association of America, Inc (" RIAA"), a trade association
controlled by the five major labels who account for over 80% of all domestically copyrighted
content produced and distributed in the United States (the "Major Labels"), acted as a negotiating
agent on behalf of its members in the CARP proceedings.
7. The CARP submitted its report to the Librarian of Congress on February 20, 2002,
which report included certain recommendations as the appropriate webcasting royalty rates. (the
"CARP Rates").
8. However the Librarian of Congress rejected, in part, the CARP report, and the
Librarian of Congress set the rates in a final order that was announced on June 20, 2002, and
which was published on July 8, 2002 (the "LOC Rates") 2
3 COMPLAINT
9. The LOC Rates were primarily based on the royalty rates that were agreed to in a
licensing agreement between Yahoo, Inc., the second largest commercial webcaster in the world,
and RIAA (the "Yahoo Agreement"). In his July 2002 f
but .07 cents doesn't seem that high. thats not 7 cents, its $.0007.
one month is 720 hours, times 60 minutes, divided by 4 minutes/song, is about 10,000 songs a month. multiply this through, and thats about $7 a month to operate an internet radio station.
surely without multicast, the bandwith alone costs much more than this?
I didn't read the articles either, but this had to be cleared up for those who don't know the situation....
The RIAA, as an organization, managed to move themselves into a position where they are the sole entity authorized to collect and distribute the performance fees for music streaming. I am not aware of any group or comitee that oversees the RIAA in this activity, and being well aware of the unethical-when-they-can-get-away-with-it actions of their members, I think that it would not surprise anyone if the RIAA decided that smaller non-member music companies and performers were completely ignored when it comes time to pay out the fees RIAA colected on their behalf.
The way I see it, this issue is simple. There is no reason at all that webcasters should be forced to pay more to play songs than broadcast radio. We all know how much radio pays the RIAA. (hint: less than nothing) But that's because the industry can control the radio biz through payola. Webcasters are distributed and beyond control, and THAT'S why the RIAA's trying to force them to pay massive fines which radio doesn't. The only reason this is even an issue is the insistance of our government that anything Online has to be treated like it's a completely different entity than its offline counterpart. There's otherwise no excuse to make the webcasters pay, while simultaneously paying OUT to radio stations. It IS monopolistic behavior, and very possibly illegal - as hopefully the courts will decide.
Bush: He's Liberal in all the wrong ways.
While 7% of revenue or 10% of expenses (whichever is greater) for the last 4 years on a shoestring budget would put alot of small mom/pop/kid radio stations out of business.
Funny how Record industries will pay to get thier music played on FM Radio, but on the net, they will just start their own partially owned net Radio stations and crunch the little guys.
So, wheres the good free (non-riaa) Indie radio stations? With all the talk of "F*CK" the RIAA, wheres the alternative Garage/Indie/etc radio? I listen to Techno, and the best streams are UK Based. Wheres the alternatives?
If said web broadcasters really do object, the best way to hurt the RIAA is by not using their music.-There are plenty of bands out their on the web whose music could likely be picked up relatively cheaply, and denying the RIAA future profits.
If I'm reading this right..the webcasters have to PAY ~200 US a year (3 min song avg.) to the recording industry to play their music?
So why aren't radio stations paying this? They use RIAA "protected" material all the time. Is there a diference between broadcasting on the 'net & broadcasting over the radio (from a legal standpoint, that is)? I can get input from a radio station wired into my PC & record it...does that mean I'm pirating music? Or the fact that I bypassed all the storage media to get that music the real issue here?
*begin sarcasm* Or is that "lisence fee" covered in the payola they get from the music industry to push the latest "pop-phenom"..??*end sarcasm* sarcasm
I would like to propose that the idea of having the 'RIGHT' to own something or to do something is also mitigated by the responsibility one is willing to take, not only to protect that right, but also in general. I do know that the idea of the U.S. Constitution is based on the idea that human beings have inalienable rights and that these rights need protection.
Let's continue: The right to own a creative work is then mitigated by the ability by the right of someone else to enjoy that creativity; if I am creative in isolation it is called masturbation. So if I want an audience I need to allow them to enjoy my work. What are the responsibilities of the audience versus the composer versus the pimp errrrr agent...
Thats the question. Not rights...responsibilities.
I am not a lawyer...
That being said, the complaint as written is based on the Sherman anti-trust act, and in my opinion holds some water. The RIAA does control the vast majority of sound recordings in the US. They are acting in a manner to eliminate competition and maintain that monopoly. They are not doing this by producing a better product, or offering it at a cheaper price, but by clubbing smaller entities with "intellictual property" laws and forcing common aggreements on everyone.
In sum:
1. The RIAA is looks a monopoly.
2. The RIAA acts like a monopoly.
3. The RIAA acts against smaller firms to maintain the monopoly. (Prevent compeititors from entering the market.)
That sounds to me like enough of an argument for Sherman Anti-Trust to be applied.
If you RTA you'll see that the webcasters don't want to get the music for free, but just for a price they can afford... Which is a good argument when RIAA acutally pays radio to do exactly what the webcasters do.
The complaint goes like this:
Prior to when the current webcaster royalty rates were determined, the RIAA met with Yahoo! to work out rates seperate from those put forth by the Librarian of Congress, or LOC. The LOC, in turn, used the Yahoo! rates as the baseline for a "fair market" royalty value.
A similar case occured between SoundExchange (a wholly owned subsidiary of the RIAA) and the Voice of Webcasters (VOW) organization, except that the rate was now four times what the Copyright Arbitration Royalty Panel (what the LOC based the final decision on) had deemed okay.
The lawsuit alleges that the RIAA unfairly inflated the Yahoo! royalties to the point where they would not legitmately be a 'fair market value'...it was price-fixing, with Yahoo! as (possibly) an unsuspecting ally.
But what about Voice of Webcasters? Good question. The suit also claims that the RIAA/VOW negotiations were in bad faith on the part of the RIAA, and that the RIAA forced those VOW members who remained for the entire negotiation to enter into an agreement, later encoded into law as the Small Webcaster Settlement Act of 2002, that would make it even harder for webcasters to survive.
Basically, the Webcaster Alliance wants the RIAA to be barred from enforcing their copyrights against webcasters until a legitimate, non-abusive rate can be found, and that the RIAA pay for their legal fees.
They're also asking for a jury trial. IANAL (duh), so I don't know if that's a good or bad idea.
I mod down anyone who uses M$ in their posts. I like to live on the edge.
Whether this group succeeds or not, it's good to see them standing up and fighting. The general populus might take more notice and the government certainly will. This is a step in the right direction.
"I've got to stop masturbating! It makes me too lazy! Stop it, Albert. Stop it." -- Albert Einstein
Actualy, no, you are entitled to play the songs to the general public. The whole point of CARP is to mitigate the restrictions inherent in monopoly control. Remember, copyright is an artificial monopoly that is ostensibly intended to encourage creativity. The problem is that, perversely, copyright discourages dissemination of valuable ideas if the owner of those ideas loses interest in exploiting them, or perversely refuses to license them. The CARP is a kludge designed to fix that problem, by forcing content providers to license their content to anyone at a reasonable rate.
Bullshit. Educate yourself before you start spouting nonsense. If that were true, why would stations like SomaFM.com that play independent and non-corporate music still be forced to pay the RIAA? They have permission from every artist that they play. Why should they have to pay the RIAA after they pay the artists? The RIAA doesn't even represent the music they play. They are just supposed to hand over the money and expect the RIAA to give ALL of it to the people that deserve it.
How about Bassdrive.com? They play noting but drum & bass. Not one single true electronic artist is signed to a major label that is represented by a major body, including the RIAA. Every one of their artists happy to get air time on a popular network, and those who get played and ask for money get it. Why should they have to pay the RIAA?
Everyone has to pay the RIAA because their lobbyists got a law passed that assumes ALL music is represented by the RIAA and that they have final say over who gets compensated, not the artist. What happens to the money when the RIAA can't find the rightful artist (most likely an independent)? Who gets it then?
I would GLADLY pay 7/10000 dollars for the right to broadcast a song. That's 0.07 cents per song!
Multiply that by the number of listeners. Multiply that by the number of songs you play in a month.
Will I retire or break 10K?
Your right. $.336 per day per stream isn't that much, until you consider that they are streaming multiple streams. They could have several thousand streams going at once. Lets assume that are a very small shop and have 10 streams going. That is now $3.36 a day or $1226.40 a year. A larger shop doing 100 streams would pay $12,264 a year. 1000 streams would be $122,640 a year. Spinner.com does 22 million songs a week. That's $800,000 a year . Now they will have to pay those fees back to 1998, so you are going to have to multiply those figures by 5. Now do you see where the problem is?
Actually, it wouldn't.
The RIAA's subsidiary, SoundExchange, is currently the sole designated agent for collection distribution royalties, as per the U.S. Copyright Office.
What this means is that SoundExchange, a.k.a. the RIAA, is authorized to collect on behalf of all copyright holders. Even those who aren't members of the RIAA proper.
To put it another way, even if I were to start a band, and a Shoutcast station devoted solely to my band, or to local unsigned bands throughout my city, the RIAA (as SoundExchange) could knock on my door and demand royalties! And since none of us are members of the RIAA, we wouldn't see a red cent!
This is just a taste of the asinine legislation currently binding webcasters thanks to the RIAA's powerful lobbying power.
It seems that the current generation raised on Internet don't realize that for hundreds of years there have been laws esatablished to protect people's rights and just because law on the internet has been difficult to enforce doesn't mean that people's rights stopped being important.
There is an alarming trend for the opensource community to appear to outsiders as very cavalier with issues dealing with protecting rights for others to derive profit from their works. Perhaps the mindset is "I gave all my code away for free, why should I care if you make money from your game/music/movie/software/patent/intellectual property/licensed image/registered trademark ?".
Do "opensourcers" belive that if something is not covered by a GPL-like license that it's okay to ignore that license, just because they're not afraid of being caught?
I'm all for patent reform and whatnot, but... until laws are changed, those laws still exist. Do I think that the RIAA and MPAA are locked in a downward spiral and that they're getting ready to pull a 'SCO'? Sure I do. With a world full of indedpendent artists and movie makers and the internet as a distribution method, It's completely conceivable that we could have "GPL" bands and movie studios releasing GOOD STUFF onto P2P network. Hey opensource/free software community: In a band? Have a video camera?
Ever wonder why department stores play MUZAK? It's because they PAY a company for the rights to play that MUZAK in their store, and MUZAK is cheaper than real music. If we really care so much, isn't it our responsibility to provide an alternative?
If you own a bar and play a radio with hip-hop tunes on it, do you know that you should be paying royalties to the artists? Do you know that if you run a restaurant and you show a movie in your restaurant that you are supposed to pay royalties?
Do you know that you're not allowed to have a picture of Bart Simpson on your website? Do you know that your favorite movie sound clips may not be 'fair use'?
Just because the internet has made it easy to share content, doesn't mean it's right or legal. Try to picture it from the viewpoint of Linux vs. Commerical OSes - if you don't want to support MPAA and RIAA, then *WE* need to provide an alternative, otherwise we need to play by their rules or petition to have the rules changed.
What gets me is that subscribers are PAYING for his little comments about Speakeasy. Christ, take it up w/ Speakeasy, Michael. Try acting professional for once. Leave Slashdot out of it.
This guy is way out there
The problem is that unlike normal broadcast radio, where the radio station pays per performance, with internet radio, RIAA sees that there's one stream to each user, and wants payment per performance PER USER.
With 50,000 people listening to the same MusicMatch radio song, that's suddenly a LOT of money.
To make it even worse, what happens when a user doesn't like a song and switches channels? Pay twice! A radio station doesn't have to pay extra if a user skips to a different channel. But for internet radio, there's a payment for the song you listened to before, and the one you're listening to now.
What's apparent here is GREED -- RIAA isn't content with getting a similar amount as they do from broadcast radio stations, but want additional levy "because they can". The justice system in this country, headed by the Senate and Congress, is more corrupt than any banana republic official, and will gladly give big business whatever they want, as long as they get their support in return.
Don't expect any fairness here. The only concern is how much can small businesses be bled without dying.
Regards,
--
*Art
The slashdot crowd is more intelligent than most, so I'd like to help everyone understand the portions that aren't even present in the above article and are certainly a part of this story, as I have been talking to Ann Gabriel of the Webcaster Alliance on a regular basis lately.
This is not about the actual rate per song, although it is certainly an issue, as much as it is about the fact that the people who are forced to pay this rate are not given a chance to take part in the negotiations. This is in part to the prohibitive cost to enter into the negotiations, as anyone who wants to participate in the CARP hearings must bear the cost of the hearing itself, which consistently runs into more than a million dollars per hearing. The cost of the hearings is not determined until it is finished, and is calculated at the rate of $200 per hour for each of the lawyers on the panel.
The real issue is that the RIAA pre-negotiates with the major players, leaving them as the sole representative of, oh, everyone in control of the current music cartel. This means that they are colluding their copyright power to exclude others from negotiating.
In the Napster case, the federal judge found that the RIAA was a monopoly and was using collusion in a refusal to negotiate, which was the basis for David Boise's counter-suit and a blatant violation of the antitrust laws. In Napster, the judge decided that since Napster was "bad" first, the RIAA got away with it.
The webcasters consistently get told by the RIAA that they are playing too much independent music, in a manner that legally amounts to threats and bullying. Many webcasters have dropped major label music altogether.
The other issue is that the RIAA, through SoundExchange, which is basically an RIAA subsidiary, collects all the money for royalties. Since the independent artists are not part of the RIAA, we will never get paid our portion of rightfully earned royalties.
Additionally, the FTC has found the RIAA in violation of the antitrust laws several times in the past 12 months alone -- price-fixing seems to be the greatest consistently violated provision but one seldom spoken of violation was using the record clubs to avoid paying royalties to authors. Each time they get caught, they settle out of court, try to kick it under the rug and continue on their merry way.
The RIAA completely controls radio, the media, and is now trying exert its monopoly over the Internet. In the case of the Internet, the real problem is that the indies can use it, too.
Considering that the music industry sends out in excess of $4 billion annually in free physical goods (average over the past five years), you'd think that they would embrace the free promotional tool available. The problem for them is that the independents have access to it, too.
The entire idea behind calling downloaders pirates and making the false assertion that downloading copyrighted material is theft is to intentionally exclude the tens of thousands of us who WANT people to download and listen to our music.
It's not about those fractions of a penny per song. It's about the fact that less than 10 percent of the recorded music controls more than 90 percent of the market. The rest of us aren't allowed in.
We can reach a global audience without the record labels right now. That's why the RIAA is fighting so hard to criminalize P2P. Because then they own the entire market for recorded music and the only way to reach the public will be through a major label contract -- again.
Antitrust is the ONLY way to stop the RIAA.
Ahh yes, the RIAA member companies own the copyrights, but the playback rights belong to the songwriters. Those are collected via ASCAP/BMI and don't go to the labels. Here's how it worked in the past:
Analog stations paid ASCAP/BMI
Digital stations paid ASCAP/BMI
Now here's how it works:
Analog stations pay ASCAP/BMI (and get payola, that's another story...)
Digital stations pay ASCAP/BMI AND the RIAA (because when you listen to a digital station, it's like them giving you a copy of the song, so the station has to pay for every user's piracy, no, really, that was the RIAA's argument to get the law passed)
Sound fair? Nope. If an analog station had to pay the royalty rates they want digital stations to pay they would go out of business. Running a digital station costs just about as much as running an analog station of the same size (bandwidth/severs vs towers/amps/huge fcc license fees), so why should special rules be made for internet broadcasters? Because there are more of them than the RIAA can control with payola, and this is a threat to them.
People whine and complain about the RIAA all the time, the only real way we have to shut them down is with the mindshare of the people. If you want the mindshare of the people, we need independent internet radio to ween society off the RIAA.
I'm surprised how little about Fee Waivers I've seen. I'm aware of one lable (Artemis Records) who had agreed to waive their fees (statutory licensing).
Why not reward companies (or individuals) who are willing to be more flexable? I'll be sending out a flurry of requests of the next month (preparing to launch my own micro internet radio) and I will only be featuring artists who are willing to be played for the free promotion alone. Why support the RIAA?
Big companies might not be able to do this, but they probably have the budget (and income) to pay for the right to use the music. They probably should pay.
Quack, quack.
As many others have pointed out already, this is all about control. They can control the radio so that you hear the same 7-10 songs every hour. The only time you hear something outside of that block is when someone has a new album coming out and you hear all their old stuff that week. They never play anything else. They never play anything different.
There are far too many internet radio stations possible for them to be able to buy them all the way they've bought radio (Payola..don't argue this fact. Radio is paid for. ASK anyone in radio before you argue this fact). As a result I can go online and listen to nothing but bob marley, or protest songs from the 60s or polka or russion techno or even just plain old 80's cheese. NOt during lunch. NOt once a year on some special holiday weekend. anytime I want. They can't use internet radio to push this week's hot new albums or the billboard top 40 adn it pisses them off to no end. So instead they're gonna price the fees in such a way as to kill off all the internet radio stations except for a handful who will undoubtedly sign special contracts agreeing to pay less in exchange for "format control". the result: You get less. You get less music. You get less variety. You get to expand you mind and musical boundaries less. YOu get to hear your old favorites less. YOu get less.
RIAA gets more control.
That ain't right. Internet radio should NOT have per-listener fees.
because I have been enjoined by this Holy Office to abandon the false opinion which maintains that the Sun is the centre
Really? How in the world did they get away with making a law retroactive? I could have sworn that was prohibited in the constitution, something about ex post facto laws...
Copyright. Is. Not. Property. It. Is. Not. Ownership.
Copyright is the control of the license to copy. Period.
It is not, not not NOT ownership of songs. No one owns a song. Songs do not exist in physical space. You cannot own them anymore than you can own a dream.
A song, like a dream, really exists in the mind. Attempts to own patterns in the mind are obscene.
Jefferson and the others were correct. Ideas are the property of all -- with the caveat that the originator may license copies of a idea, for a LIMITED period of time, to encourage creative people. But they never intended products of the mind to be PROPERTY.
And: the law of copyright was a compromise. Limited time, then release it to the public. The IP "owners" now have broken their side of the bargain by effectively eliminating an expiration date, thanks to the idiotically literal Supreme Court justices.
They broke their side of a two hundred+ year old bargain. They want to turn all the works of man after 1920 or so into their private property, to be bought, sold, and hoarded, forever. As far as I am concerned, the contract is void between the public and the record, movie, and book publishers, and they were the ones who voided it with their own greed and memetic manipulation. They sowed the wind. Let them reap the whirlwind.
Text of an email I sent to Speakeasy:
o rder dept.*
These comments are taken off of the front page of www.slashdot.org and were made by michael@slashdot.org This seems to be very bad publicity for your company. Will you be posting a response? You may want to have your public relations dept take a look at this website and these comments.
(in order)
> *from the speakeasy-dsl-sucks dept.*
> *from the speakeasy-has-spent-two-weeks-without-placing-my-
> *from the i-thought-premium-price-meant-premium-service dept.*
> *from the not-in-speakeasy's-case-certainly dept.*
*from the even-writing-to-speakeasy's-ceo-gets-no-results dept.*
This guy is way out there
Wrong. Radio broadcasters pay a fee for every song that is played over the air. The killer for web broadcasting is that the license fees are per song PER LISTENER, shoving not only higher fees onto smaller radio stations, but also more recordkeeping requirements.
Okay, as I understand it, the RIAA is making the argument that each listener on a given webcast is copying a song to do so, and the broadcaster is thus liable for that. Bear with me and let's assume for the sake of argument that this is valid reasoning.
Now, where does that leave satellite radio and the digital cable providers like Time Warner who have dedicated music channels in their offerings? By the same line of reasoning, are not both of these distribution methods liable for the same goofy "one listener, one copy" line of reasoning the RIAA has managed to foist onto webcasters? If not, why? The digital reciever in your dashboard or the cable box has to copy the content just like your computer does when listening to a webcast. What about DTV stations that run concerts? If being a digital broadcast is what has the RIAA's panties in a wad re: webcasters, it seems horribly unfair to level ridiculous fees on them, but not the other digital broadcasters.
Please stand clear of the doors, por favor mantenganse alejado de las puertas