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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."

15 of 388 comments (clear)

  1. Canadian Artists by tobechar · · Score: 4, Interesting

    So far in Canada, artists have not been paid a cent from the CD-R royalties we all pay.

    Where does it all go? Well, at least we know where it doesn't go.

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  2. FNORD by virgo+cluster · · Score: 5, Interesting

    Might this be the lame excuse for the shift to Digital Restriction only CDs? Because it serves the customer because it doesn't have to be twice as expansive?

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    -virgo cluster
  3. Can't they just claim... by Anonymous Coward · · Score: 1, Interesting

    The WMA's are provided as backups to the uncompressed music on CD. Therefore, we don't need to pay for a second copy, since the said second copy is a backup, that is granted for under normal personal use rights?

  4. The neat thing about this: by grasshoppa · · Score: 2, Interesting

    Yes, the record companies will have to pay more ( which will become a higher consumer cost, mind you ), but what's really cool is if they don't play ball with the publishers, the publishers have the right to sue for "damages", which could be substanially more than the actual missing royalies.

    --
    Mod me down with all of your hatred and your journey towards the dark side will be complete!
  5. How about SACD by Anonymous Coward · · Score: 1, Interesting

    Some SACDs have two versions of the songs. One for normal CD players and one for SuperAudio players. Does this mean that they fall under the same double royality problem?

  6. Re:Solution: CD with DRM Software by MikeXpop · · Score: 4, Interesting

    I'm sure my stereo will love that.

    --
    Etiquette is etiquette. He kills his mother but he can't wear grey trousers.
  7. Not As Simple As That? by tonyr60 · · Score: 3, Interesting

    I have a couple of issues with the logic that 2 copies of the song are being sold.

    First up, is it not really a single user license to play the song that is being sold?

    And, only one copy of the music can be played at any one time.

    So how is the copyright holder disadvantaged by this?

  8. Re:The little guy gets paid? by Frymaster · · Score: 4, Interesting
    Are you insinuating that the "little people" in the record business don't get paid their fare share?

    well, if we're keeping track of who's doing the insinuating, add me to the list.

    steve albini's the problem with music is a well-documented accounting of how bands on major labels get hooped by clawback clauses. read it. no, really.

  9. Let me see if I understand this... by Copperhead · · Score: 5, Interesting
    Customer : I should be able to rip music off the CD I just purchased for my own personal use without having to pay for a new "license". I bought this CD with the understand that I was purchasing the music for my personal use, and don't need to purchase a license for each new copy.

    Record Labels : No way... just because you bought the CD does not give you the right to all the contents to do with as you wish. However, just to be nice, we will give you a low-quality, non-transferable rip of the song.

    Artists : Wait... aren't you making another copy of the song? Since are selling two different copies of the song for every CD you sell, we're going to charge you twice the royalty.

    Record Labels : No, we purchased the song from you for a particular customer, not for an individual copy of the song. As long as a single customer uses the song, we can do whatever we want with it.

    Customer : Wait... isn't that what I just said?

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    Your reality is lies and balderdash and I'm delighted to say that I have no grasp of it whatsoever. - Baron Munchausen
  10. What about the lyrics? by Nakito · · Score: 5, Interesting

    Consider this: on almost every album since Sgt. Pepper, the record labels have included printed lyrics along with the album itself. Lyrics are, of course, copyrighted. So the copyrighted lyrics are provided twice, in two different formats: once printed and once sung. Does this mean that lyricists have been cheated for 35 years?

  11. Screwing the Artist by lukior · · Score: 1, Interesting

    I actually do believe in "screwing the artist" as you put it. Not that I don't believe the artist deserve to be remunerated but I think they should receive money from live performances and merchandising. I believe that artists should be part of the working class like everyone else. The RIAA is no longer needed in my belief. I have a huge collection of music much of it gotten in ways that some might not approve of but I also attended more than 100 concerts last year. I paid thousands of dollars for music that actually went directly to the artists. I wouldn't have gone to many of the shows had it not been for .mp3's i had listened to earlier. I believe they need a whole different business artist that attempts to provide a living for many artists as opposed to riches for a few. Just my two cents.

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    I would like to salute the ashes of american flags, and all the fallen leaves filling up shopping bags.
  12. Re:Solution: CD with DRM Software by vhold · · Score: 3, Interesting

    Can you imagine if when recorded music first became widely available and used if live musicians successfully sued to have the technology banned or heavily taxed because it would put them out of business? Apply that kind of logic to every sector and you've got a world of nothing but amish lawyers and tax collectors.

    Whats far more ridiculous though is they think its sensical to inconvience the paying consumer when they could just get a no strings attached version online. I'm sure the vast majority of people ripping their own CDs are honest consumers who want to make mix discs, use MP3 players, play it on their computer and that sort of thing. Everybody else has already downloaded it, only one person needs to make a halfway decent version of a rip and then the copy protection ceases to accomplish anything whatsoever other then to discourage people from buying CDs.

    Music CDs that attempt to instantly install software on your computer that limits it's functionality? What kind of crack were on they on when they thought that sort of behavior was going to pay off for them?

  13. Re:So much for... by mobiux · · Score: 2, Interesting

    If they shouldn't have to pay for royalties, then why do I have to rebuy my music when they come out with a new format.

    I should get free CD's of all my old cassette's, LP's and 8 tracks.

    To quote Tommy Lee Jones,
    "this means I have to buy the White Album again"

  14. Re:let me be the first to say... by i_r_sensitive · · Score: 4, Interesting
    First off, they aren't paying for anything, people who buy music are, they aren't going to eat that cost, just pass it along. After all, the money they've spent has been in reaction to a perceived threat to their revenue stream, this is not a cost I would expect anyone to happily defray.

    Secondly, what is this fair use rights? I strongly suspect in the end it boils down to your assertion that you should get something for nothing. That is an incorrect assertion. If you are talking about the try then buy "right" then I would suggest you explore how much that relationship is based on trust, and what little reason the other side has to trust the average consumer in view of the rampant exhcange of illegally copied/distributed material.

    Back in the tape to tape or CD to tape days these concepts had meaning. It wasn't easy to perform large scale unlawful copying. The music industry turned a bit of a blind eye to the whole affair because it was not perceived as a negative. Throw in the internet and peoples (mistaken) impression that it is nothing more than unlimited freedom with no responsibility, and that equation changes drastically, and rapidly. Factor in that people seem to now expect the music industry to accept that people can defraud them of their due revenues by unlawful copying and distribution is not only narcisistic and short-sighted, it is unrealistic and plainly not going to happen.

    I would suggest you consider what you think is fair use, is it really fair? If it is fair, is it predicated on trust that has been abused and broken? Would it be fair from the other side of the equation? Is it fair to the artists who ultimately produce the work in question? Is greed a sufficient justification to deprive these folks of what they are due from their creations? Hey even if you know that they are getting ripped off by the label worse than the consumer, please explain to me how it is depriving them of what revenues they can generate demonstrates aawareness of or support for their plight?

    Bottom line, there are consequences, this is just another one, a slightly humorous one, but just another consequence. Go ahead, keep on pulling the Kitty's tail, that will make it better...

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    "Talk minus action equals nothing" - Joey Shithead, D.O.A.
    "Talk minus action equals /." -
  15. Re:Costs to Consumers by bechthros · · Score: 2, Interesting

    Well, it's been said, but it bears repeating:

    when VHS movies were first available for sale, they were like $80. 20 years later, they are now about $5.

    When DVDs were first available for sale, they were about $50. Five years later, they are now about $15.

    when CDs were first available for sale, they were about $18.99. 20 years later, they are... $18.99. And the RIAA and major labels have all been found guilty in US courts of price-fixing, multiple times.

    Look, simply put, if there were no shoplifting, you can bet that pack of gum would cost $10. If you couldn't go to friends or family for a loan of money, you can bet the interest rates charged by banks on those same loans would skyrocket. Capitalism works best when there's just enough alternatives for the consumer to keep the merchants honest. Obtaining the goods without paying the merchant is an alternative for the consumer. Really, it is the logical extension of consumerism - what could possibly be morally wrong about wanting the best deal possible? The greed of the consumer balances out the greed of the merchant. Checks and balances. Sounds American to me.

    CD=$18 for 72 minutes of 44.1 kHz 16 bit audio only, presumably up to $36 under this new claptrap

    DVD=$5-$20 for over 90 minutes (usually) of mpeg-2 video PLUS 24bit 96kHz audio, PLUS extra footage, PLUS theatrical trailers, PLUS whatever else they can fit on the disc

    No, there's no discrepancy here, move along folks, nothing to see here, pay no attention to the man behind the curtain...

    And besides, I know the record companies aren't paying the artist. I know because many of my friends are on these receord labels and get sued way more often then they get paid. So why should I pay the record companies? So they can continue mistreating their workers? If I keep giving them my business they'll have no incentive to change. I fully support record labels that treat their artists fairly with my cash - I have downloaded zero songs from dischord records. If the record companies want my business that's great, all they have to do is stop gouging me on CD prices (like they've already been ordered to do by the govt)and stop litigating against my friends.