RIAA Claims Ownership of All Artist Royalties For Internet Radio

ISurfTooMuch writes "With the furor over the impending rate hike for Internet radio stations, wouldn't a good solution be for streaming internet stations to simply not play RIAA-affiliated labels' music and focus on independent artists? Sounds good, except that the RIAA's affiliate organization SoundExchange claims it has the right to collect royalties for any artist, no matter if they have signed with an RIAA label or not. 'SoundExchange (the RIAA) considers any digital performance of a song as falling under their compulsory license. If any artist records a song, SoundExchange has the right to collect royalties for its performance on Internet radio. Artists can offer to download their music for free, but they cannot offer their songs to Internet radio for free ... So how it works is that SoundExchange collects money through compulsory royalties from Webcasters and holds onto the money. If a label or artist wants their share of the money, they must become a member of SoundExchange and pay a fee to collect their royalties.'"

Comments

No different from ASCAP/BMI

[interiot]

As far as I know, this is no different from other performance rights organizations like ASCAP/BMI/etc. right? They collect money for everyone, whether the artist is registered with them or not. The only question is whether we need yet another performance rights organization...

On the Compulsory License

[corvair2k1]

The article is overly inflammatory, adding emphasis to quotations (which the author/editor doesn't claim) to the word "compulsory" in "compulsory license". Obviously, they didn't do much research into what the compulsory license is in relation to copyright law.

The compulsory license is largely a way of ensuring that, if a content distributor wishes, it can use certain types of copyrighted works in certain ways. An example includes making a cover of a copyrighted song. Usually, royalties are paid to the songwriter in such cases, and you can work out favorable terms to both parties. However, if the parties don't come to agreement, the content distributor can instead agree to the compulsory license and agree to pay said artist based on the published rates. As long as this happens, the original copyright holder cannot sue (because he/she is getting paid as dictated by copyright law).

In short, this means that you can indeed make a license directly between you and the copyright holder itself. However, if you're going to use the compulsory license, there is a procedure that has to be in place aside from mailing an unexpected check to the copyright holder... There's no proof you paid!

So, it's a bit different than the article's author paints it. Of course, most wouldn't agree that the copyright holder should be a member of SoundScan in order to get their royalties, but it's an entirely different issue.

Re:On the Compulsory License

[cpt kangarooski]

He's saying that it is sometimes the case.

Basically, the Internet radio station has two licenses it can choose from. It can make a license with the copyright holder directly, for whatever terms they can agree on. Or it can ignore the copyright holder and use the statutory license procedures, which require sending the money to SoundExchange, which will disburse an appropriate amount to the copyright holder if the copyright holder goes through the procedure it has to to get it.

So radio stations can avoid doing business with SoundExchange, but copyright holders shouldn't, since they don't have control over whether radio stations will use the statutory license. Many will since it's easier than negotiating with each individual copyright holder, however.

Re:when I was a young boy

[mrcdeckard]

your father was correct. in fact, as another poster mentioned, the eq curve still bears the name of the organization (RIAA EQ CURVE), and basically describes how vinyl should be "encoded" during mastering, and "decoded" during playback.

it's an issue with vinyl, because if the cutting head moves too much (from bass frequencies), it can actually cut into the adjacent groove, so you can compensate by turning the head in more each turn, but the storage capacity (length of time) suffers.

interestingly, how bass energy is dealt with today is super duper limiting -- this can almost be thought of as dynamic eq, but it's not. it takes place in the time domain rather than the frequency, but when a blip of low end energy hits the limiter, it turns it down -- coupled with the make up gain, this effectively turns everything else up.

this is why modern music SOUNDS LIKE ALL CAPS.

mr c

Hmm... this sounds familiar

[UObean]

Allofmp3.com collects royalties of all the music they sell and offer it to the RIAA. They cry and moan and refuse the money because they don't like their business model. Now suddenly its completely ok to collect royalties for someone else when you don't have the copyright for the work, but only so far as the RIAA is the one doing the collecting.

Take Off Every FUD...

[Mad Bad Rabbit]

According to the SoundExchange FAQ,
this only applies if you want to rely on SoundExchange to get you a statutory license.
So stations willing to negotiate directly with the artists and get nonstatutory licenses,
wouldn't have to pay SoundExchange royalties. (Although that said, they apparently forbid
SoundExchange members from granting separate licenses, so this would only work with artists
who are willing to boycott SoundExchange...)

(ObDisclaimer: me am not copyright attorney though)

Re:Take Off Every FUD...

[Baricom]

Based on this post, it should be noted that if you play any music from a SoundExchange member, you are required to pay royalties on a play of a non-member's music, and that non-member cannot claim those royalties without giving up the right to work outside of SoundExchange. Quite a racket the RIAA has there.

Re:i thought this was what ascap was for

[Anonymous Coward]

The record companies (RIAA) created a NEW license for internet radio because they don't get a cut from performing rights (BMI, ASCAP, SESAC). BMI, ASCAP, SESAC still have the performing right to collect... SoundExchange is JUST the new license so the record companies (mechanical) can get a cut.

Just so we're clear

[Spazmania]

This is from the FAQ:

What licenses does SoundExchange administer?

The Digital Performance Right in Sound Recordings Act of 1995 (DPRA) and the Digital Millennium Copyright Act of 1998 (DMCA) granted a performance right in sound recordings for certain digital and satellite transmissions. In exchange for this new right, SRCOs are subject to a compulsory license for the use of their music, provided the user complies with those conditions set forth in the copyright law. SoundExchange was established to administer the collection and distribution of royalties from such compulsory licenses taken by noninteractive streaming services that use satellite, cable or Internet methods of distribution.

For those of you who are caught up in the language, let me make it crystal clear for you: There is a license which artists must grant under law, a compulsory license, which allows certain digital performances. If you record a song, anyone may use it under the terms of that license.

As with the GPL, anyone may accept. Anyone may decline. If you decline, you have no rights to perform the song under the license. You may still acquire an alternate license directly from the copyright owner and do anything the owner authorizes, including perform the song in a manner similar to what is allowed by the compulsory license.

You owe fees to SoundExchange only if you accept the compulsory license and perform the song under those terms and conditions.

Now, SoundExchange doesn't want you to know this. They have very carefully crafted the language in their documentation to lead you to the impression that paying them is the only option. Nevertheless, if you read carefully you'll find that's not what they actually said. And if you read the relevant sections of the DPRA and DMCA, you'll find that's not what the law says either.

Re:Just so we're clear

[Spazmania]

Its a rather funky area of law.

Historically, broadcast radio stations get to play your music for free. Back before home recording was common, some radio stations got sued but won: through some really foul reasoning not supportable by existing statute, the judge held the broadcasts to be fair use. That has since been enshrined in precedent and tradition.

So, when Internet radio was on the horizon, RIAA conspired with a couple members of congress to cut it off at the pass. Internet radio is explicitly not fair use under the statutes. Instead, Internet radio stations are entitled to play you song under a compulsory license. The statute requires the Librarian of Congress to set and periodically revise the specific terms of the compulsory license.

Its compulsory in the sense that the copyright owner doesn't get any choice about whether to offer the license and he doesn't get any choice about the terms. Think of it as a form of fair use that you get paid for. You may, however, offer any other licenses you choose. And anyone wishing to broadcast the signal may accept one of those other licenses instead; the compulsion lies only on the copyright owners' side.

SoundExchange fits in to the picture as the only entity presently designated to collect the fees for recordings played under said compulsory license.

Re:How Are You Gentlemen?

[Tablizer]

No, its "All your bass are belong to us"

Re:Illegal.

[the_womble]

It is not true. This is Slashdot quoting DailyKos - what sort of standards did you expect?

1) You do not have to be a member to collect fees through sound exchange, though you do have to pay them an admin fee.

2) There is nothing to stop radio stations from making direct agreements with copyright holders and by passing Sound Exchange. You only need to use Sound Exchange to make use of the compulsory license.

The practical problem is that it would be a lot of work for a radio station to contact every copyright owner (often two of three per recording) and negotiate agreements with them, so it is difficult to avoid using Sound Exchange.

Solution for non RIAA copyright holders: unless you are going to make lots of money off radio (not likely) just have a free license for radio and net broadcasters.

Re:Surely this must be a joke...

[neerolyte]

When people stop throwing in red hearings into important discussions Wrong, when people stop using words they can't spell. It's herring.

Re:not a joke

[OrangeTide]

Punk was traditionally released on independent and self-published labels.

Re:when I was a young boy

[Anonymous Coward]

For a production run the masters are cut on a lathe then the presses are then made from the master. "test-pressings" (which aren't actually pressed) and low volume runs (dub plates) are cut directly to acetate.

Oblig wikipedia

Re:when I was a young boy

[mrcdeckard]

although vinyl masting *could* use a compressor to squeeze more onto the vinyl (and maybe necessary if the master tapes have a higher dynamic range than the vinyl), but it's not part of the "spec". the RIAA EQ curve really is just a curve - and can almost be thought of "compression" in the information sense. the key is that it's tied to the format, and all consumer record players have a "decoding" eq built in.

the limiter for the digital stuff i was talking about IS a compressor. but it's not decoded during playback.

i had a tascam ms-16 1" tape machine that had dbx I noise reduction. this essentially boosted the highs and applied a 2:1 compressor going TO tape, and did the opposite coming off of tape. it worked well (i never used it, though, for aesthetic reasons). this is an example of time-domain compression and EQ ( i wonder if the EQ can be thought of as frequency domain compression . . . .)

mr c

Re:when I was a young boy

[alienw]

sounds like are talking about "compression" which is dynamics processing, but not EQ - a compressor (like any audio processor) has an input and an output - you define a threshold and every time the input gain surpasses the threshold, the gain is reduced by a specified ratio and that becomes the output - as you mentioned,

Your description of compression is not correct. If you just clipped the peaks of the signal, you would get nasty distortion. Compressors actually run the signal through an envelope detector, lowpass it with an adjustable filter (which determines the attack/release time), and then use that signal to modulate the gain of an amplifier. The compressor doesn't look at the signal, it looks at the envelope of the signal. A compressor differs from a limiter in that compressors can increase AND decrease levels, while limiters only decrease the level to prevent clipping.

Compression is a valid technique, and it is impossible to make a good recording without it. However, it has been notoriously abused by recording engineers trying to make the recording sound "louder" on the radio, and making the CD sound identical to the radio version. This is a symptom of the general decline of hi-fi audio, and the proliferation of automotive CD players. Many recordings today have a dynamic range of only 0.5dB, which makes them sound flat and lifeless. They are also recorded at a much higher level, with considerable distortion already in the recording. If you listen to The Dark Side of the Moon, leave the amplifier knobs where they are, and pop in Californication, your ears (and possibly speakers) will pretty much explode.

Magnatune.com

[falconwolf]

Magnatune.com

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Falcon

Re:RTFA

[gbulmash]

The U.S. Gov't gave themt he right to do this. It's not theft, it's not criminal, it's just corrupt. Your anger should not be aimed at the unnelected construct of law who's only legal purpose for existing is profit - it should be aimed at the assholes in gov't who did this. I'll bet you your congressman dosen't know about this.. maybe you should tell him.

IANAL, but I figure you could still sue SoundExchange and argue that the LOC doesn't have the right to create a national monopoly that not only violates the Taft Act and RICO, but constitutes tortious interference (an illegal interference with your right to enter into a contract, such as a contract via which you grant a net broadcaster a right to stream your content without royalty payments) on an unheard of scale. But you'd have to have some pretty big bucks to file and pursue the case, because it would probably have to go through a couple of rounds of appeals and eventually be argued before the Supreme Court.

OTOH, as is the argument with many monopolies, in trying to justify their existence, they'll argue back about how their monopoly creates efficiencies and prevents chaos, and is actually a benefit to the people.

But it's the fact that SoundExchange doesn't allow that royalty exemption that will be their undoing, because a court can rule that their monopoly has been abused and creates a greater harm to the public than any good their monopoly creates. They should neither have the ability to force you to sign up with them and pay fees to get your content heard or collect royalties against your will. And because they do so, they create a public harm that goes against the intent of any law that allows the LOC to grant such a monopoly. At minimum, a court could tell them that they must amend their anticompetitive practices and policies or face being stripped of their monopoly.

- Greg