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Record Labels May Have to Pay Double Royalties

douglips writes "News.com.com.com brings us this article explaining how record labels may be bitten by CD copy protection. At issue is the mechanism that places duplicate WMA tracks on the CD. The labels are thus selling two copies of each song, and may be required to pay twice as much to music publishers. So not only is the DRM ineffective, it also could be a huge legal liability for labels."

27 of 388 comments (clear)

  1. The little guy gets paid? by VinceWuzHere · · Score: 5, Insightful

    I wonder if this means the lyrics writers and all the other "little people" behind the scenes will get paid twice - finally the value of what they are worth...

    1. Re:The little guy gets paid? by gcaseye6677 · · Score: 4, Insightful

      I highly doubt the record labels will pay out twice. They'll say something along the lines of "We're not paying you twice, if you don't like it, sue us." We can all imagine just how much of a chance an artist has at prevailing in a suit against the well funded RIAA.

  2. Of course you know what will happen next... by Cherveny · · Score: 5, Insightful

    If the payments are made, then of course the labels profits will fall. So, what will they say next quarter to make their shareholders happy? "It's all because of those damn internet pirates. We need more legislation against them, or our profits will continue to fall."

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    --- It's not my fault this post looks redundant. I just type too slow.
  3. No problem by mao+che+minh · · Score: 4, Insightful

    The record industry will just price-fix in the added costs, problem solved.

  4. A silly proposition by Anonymous Coward · · Score: 3, Insightful

    And I suppose if they included .ogg, .rm, .wma, .mp3, .mp4 files, each would be a copy and therefore to be charged for?

    Whether or not the record companies deserve this, it's basically an asinine proposition that everyone possible be reimbursed every particular format included on a CD. Very, very last century. But, what do you expect from artists like Metallica?

  5. Solution: CD with DRM Software by G4from128k · · Score: 4, Insightful

    Why do they have to put copies of the tracks in both formats on the disk? Why can't the labels create a small software application that hides the raw data tracks from PCs and "allows" the CD owner to create DRMed files? This would bypass the "pay royalties twice for distributing two copies of each track" problem.

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    Two wrongs don't make a right, but three lefts do.
  6. I don't see the problem... by smack_attack · · Score: 5, Insightful

    They already charge twice as much as a CD is worth.

  7. Redamndiculous by happyfrogcow · · Score: 2, Insightful

    Even though this is comming from "Music publishers and songwriters, who are entitled to payments of a few cents for every copy of a song sold," this is so rediculous I don't even know where to begin.

    the whole recording industry is so out of touch, not just the RIAA stormtroopers.

  8. That's ok by freidog · · Score: 4, Insightful

    the labels will just double the price of CDs and blame it on file swapping.
    You didn't think the consumer would get out of getting screwed did you?

  9. Let me quote Ross Perot by Texas+Rose+on+Lava+L · · Score: 4, Insightful

    If you take one cent, and double it, you get two cents.

  10. Re:So much for... by ericdano · · Score: 2, Insightful
    Yeah! Lower the price, and people will buy them. Seriously. It's not rocket science. Why spend all that money on copy protection when people are still going to be able to circumvent it.

    Make the product cheap, and people will buy it. Simple.

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    It's either on the beat or off the beat, it's that easy.
    I moderate therefore I rule!
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  11. Re:let me be the first to say... by Metallic+Matty · · Score: 2, Insightful

    That wow, that sucks eh? Having to pay more to ship your product? Poor little labels....

    I think little labels may be exact the people that will be most hurt by this. I've purchased some very quality cds for about $9 (which is much more fair IMHO,) from smaller labels who carry less-than-famous artists. Could be a major hit to these small record labels, which may not have huge amounts of revenue.

  12. Re:let me be the first to say... by Condor7 · · Score: 5, Insightful



    So the small record labels can ship CDs with no copy protection. Problem solved.

  13. Re:let me be the first to say... by wo1verin3 · · Score: 2, Insightful

    I don't recall any of the little labels using any sort of archaic and non-functional DRM type protection methods.

  14. When will they learn by rhetoric · · Score: 4, Insightful

    That any CD I can play, I can rip. It's AUDIO rofl. At very worst I can just play it back and record it to another device, unprotected. Big deal.... DRM for audio is such a joke.. This isn't intended to be flamebait, it just seems so ludicrous to me.

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    "where words meet intent, lies rhetoric's lament"
  15. Re:Let me quote Nelson Muntz, by Dr.+Photo · · Score: 2, Insightful

    Nelson: Ah, le mot juste!

  16. Re:Can't they just claim... by Bagels · · Score: 2, Insightful

    Not likely... you usually don't put a backup on the *same piece of media* as the original copy, because then if the original fails (through scratches to the disk, etc.) so does the "backup". It just goes against the definition of backups - I don't think even the RIAA's army of undead lawyers could twist it enough to get that through.

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  17. Wgat will be the impact on consumers by Crypto+Gnome · · Score: 4, Insightful
    I hate to be such a downer, but if past performance is any indicator, these "additional costs" will be hoovered directly out of consumers bank-accounts.

    Look at the whole "audio+data" CD phenomenon (from the consumers perspective) in the first place.
    • Yesterday you sold me a CD which was (more often than not, to all intents and purposes) full to capacity with standard CD audio format music
    • Today you sell me a CD which is now only partially filled with aforementioned "standard ... music" - (because some of the space previously used for standard cd audio format music is now being used for DATA (in this case, a second copy of the music)
    Don't look now, but you the consumer just paid the same amount for less music.

    Just to be clear here, they sold you TWO copies of the music, in the same amount of space ====> so you received LESS MUSIC than you "normally/previously" would, for NO LESS MONEY.

    Given this trend in the music industry, in the near future they'll be selling us Holographic Storage DISCs with a terabyte of data-space, with only one (3 minute, CD-Quality) song on it (the rest of the space is 'computer format' of the same song, plus anti-piracy technologies). It'll still cost $25-$35 in most cases, and will ONLY play on a custom media player that is specific to that music-label. Due to the intricacies of the technology, swapping HS-DISCs takes approximately 5 minutes, and the "music subscription" on HS-DISCs expires in 24 hours.
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    Visit CryptoGnome in his home.
    1. Re:Wgat will be the impact on consumers by OneFix+at+Work · · Score: 2, Insightful

      Not really...most albums are only ~35 minutes in length.

      It's a simple breakdown...most songs are only about 3 minutes and some odd seconds long...lets say 3:45...

      Most albums only have ~10 songs on them...

      So, our 3:45 song on each track comes out to ~35 minutes. This leaves more than enough room for extra copies of the songs, music videos, etc...as a matter of fact, the band Offspring has a tendency to include music videos from the previous album in this extra space. It's actually very kewl when a specific artist/band that you like does this. It gives diehard fans high quality copies of videos...some they may have never seen...and as for casual listeners, it gives them a taste of the previous album, which can create new sales for old albums...

      The ultimate reason why the 3 minute song is still used is because it makes the song easy to play on the radio...this is the reason that you don't hear Led Zeppelin's Stairway to Heaven on the radio very often...As for the 10 songs on an album, this comes from the old LP days...at the time, you could fit ~35 minutes on a single LP...

      As for why they never increased the number of songs, it's because it would take even longer to make a new album and the result would ultimately cost more...so they've kept their old ~10 song limit...

  18. Is this about the atrists, then? by Milo+Fungus · · Score: 4, Insightful

    Until last year, it was the record labels that were widely viewed as the stumbling blocks to taking the music industry into the digital age...

    ...the focus on digital licensing has switched to scattered music publishers and songwriters, which typically receive between 7 and 8 cents for each physical copy of a song sold. Ordinarily wielding far less power, and commanding far fewer financial resources than the record labels, this scattered group of individuals and associations now is proving a more potent force in the digital transformation.

    The music industry has been saying over and over again that piracy hurts the artists . Their crackdown on p2p filesharing, their use of DRM schemes (such as the copy-protected CD's in question), and their public relations FUD are all supposedly motivated by their uncompromising zeal to protect the livelihood of artists.

    Really? No foolin'? Well, this is a golden opportunity to show us all that you really meant it. If all of these efforts are about protecting artists, then you would never think to violate a publishing contract over it. Right?

    [Silence... A leaf blows by...]

    Oh. Well, that's what we all suspected, I guess.

  19. It follows the labels own ideas by gr8_phk · · Score: 4, Insightful

    The labels want you to pay for every version of a song you use. You pay for the ability to use it in a CD player, again to use it on an iPod, again to use it in some other form. Using the same thinking, they should pay the artists for each time you buy a song in one of these forms. They just didn't think about it when they released the twofers and now it's a problem.

  20. Re:Yet another reason to not buy CD's by Anonymous Coward · · Score: 1, Insightful
    AAC also gives better quality with smaller files, is also an open standard, and also has no "patent issues."

    You might have an issue with patents, but the AAC patent is perfectly sound.

  21. Translation... by scovetta · · Score: 2, Insightful

    We'll all be paying more for CDs. Since the big players own the market, they can do whatever they want, and they'll just sue everyone else. The little guys don't have the big name artists so nobody cares about them anyway. They'll continue to make non-DRMed-up-the-ass CDs and no one will buy them, but if you want the new Outkast CD, welcome back $21.99! But hey, they're doing this for the artists, remember?

    And no, the big guys will NOT pay the artists more, they'll slip one by or change their contracts or whatever. Money Power.

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    Wer mit Ungeheuern kämpft, mag zusehn, dass er nicht dabei zum Ungeheuer wird. --Nietzsche
  22. Re:let me be the first to say... by DA-MAN · · Score: 3, Insightful

    What you don't seem to understand is that the Music Industry seems to want it both ways.

    When I purchase a CD for full price, if I purchased a license, I should be able to get another if my cd gets damaged for the price of the media (blank cd's are under $0.25, I assume they get an even better deal than this when they mass produce them). This is not how it currently works I should also be able to get different formats for the price of the media. If I bought a cd, why can't I download the mp3 for a modest $0.10 cent bandwidth fee?

    If they aren't licensing me the music, are they selling me the cd? Doesn't that mean I should be legally allowed to copy my cd if it get's damaged? After all it is MINE! If my cd gets damaged, I would have to pay full price for something I already own. If my car get's a scratch, I can give it a paint job, I don't have to go out and buy a new car. The same is not true for cd's.

    What is pissing everyone off with their restrictions is that they aren't being clear with what it is you get when you buy a cd. Is it a licensed product? Is it a sold product? There are different rules for each, and they want the protection of a license, without dealing with the drawbacks.

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    Can I get an eye poke?
    Dog House Forum
  23. So, what are we buying anyway? by PotatoHead · · Score: 2, Insightful

    Is it a license, or a copy to enjoy?

    They cannot have it both ways. If they intend to sell us a license, don't we need to see the terms and enter into some sort of contract? (God forbid the EULA for music CD's.)

    If they sell us a license, does that not mean we have paid for a given piece of music. If we lose the media, we still have the license right?

    If they sell us a copy to enjoy, then we can do what we want with our copy so long as we don't sell it for money. As long as I can give a CD for a christmas gift, I say we are buying copies, not licenses.

    Which is it? Want your cake and eat it too?

  24. Re:let me be the first to say... by nathanh · · Score: 3, Insightful
    If you buy scissors you don't have the right to remove my eyes with them. Just buying an item is not carte blanche. (allthough perhaps you would like to...)

    So you're accusing me of being a psychopath.

    Wow. I'm impressed.

    Reasonable use rights cease to be a right when they infringe on others rights.

    Sure, and making an MP3 for personal use does not infringe on another person's rights. I'm not stabbing them in the eye with an MP3.

    Which is exactly what happens when you unlawfully copy and distribute copyrighted materials. Your reasonable use right is being used an excuse to trample the rights of the copyright holder to their creations.

    For the second time, fair use rights does not mean unlawful copying. Copyright does deliver certain limited copying rights to the end-user. For example, with software you are permitted a backup copy. With television broadcasts you are allowed to make a copy to VHS for the purposes of time-shifting. Educators can make restricted and size-limited copies for the purposes of education. All of this can be done without first asking the copyright holder.

    You need to let go of this incorrect idea that copyright means "no copying". Your fair use rights means certain copying is permitted, even if you are not the copyright holder.

    Put it another way, your defintion of reasonable use means that if I paid for a GPL program means I can do whatever I want with it, include modify and sell it again without abiding by the restrictions of the GPL on such activity.

    #1: I didn't provide a definition of reasonable use. I didn't even use the word "reasonable".

    #2: I fail to see the similarity between making copies of legally purchased music for personal use - as permitted by law - and your ludicrous strawman example of disobeying a software license.

    Both are property, you can't support a devlopers rights to his property while obviating the rights of labels, composers and lyricists to theirs.

    And for the third time, fair use has nothing to do with obviating the rights of anybody else.

  25. More than a snowball's chance.. by Marc2k · · Score: 2, Insightful

    no, no, no.

    There *is* more than a snowball's chance in hell here. If you read the topic, it says label would pay the PUBLISHER, not the artist. I'm not sure exactly how that all works, or even if that's right, but if you look on a cd, you'll see something along the lines of "All songs published by SomethingSomething/BMI." Where BMI is one of a few publishing houses.

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