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."

Comments

The little guy gets paid?

[VinceWuzHere]

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...

Re:The little guy gets paid?

[gcaseye6677]

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.

Of course you know what will happen next...

[Cherveny]

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."

No problem

[mao che minh]

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

Solution: CD with DRM Software

[G4from128k]

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.

I don't see the problem...

[smack_attack]

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

That's ok

[freidog]

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?

Let me quote Ross Perot

[Texas Rose on Lava L]

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

Re:let me be the first to say...

[Condor7]

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

When will they learn

[rhetoric]

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.

Wgat will be the impact on consumers

[Crypto Gnome]

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.

Is this about the atrists, then?

[Milo Fungus]

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.

It follows the labels own ideas

[gr8_phk]

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.