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

All your base...

[reaktor]

does not belong to the RIAA. There are things called contracts which point out who the copyright owner is of a certain intellectual property (music). The RIAA cannot claim that it owns royalties of something it does not own. When we all thought the RIAA could not possibly go any lower...

How does this help the artist?

[Weaselmancer]

Part of the whole RIAA con is that they loudly proclaim that they are doing all the crap they do "to defend the little guy, the artist." That's how they moralize what they do. They're just here to help.

So, exactly HOW does this accomplish that? Are they going to cut paychecks to all the indie artists they're leeching off of?

I'm betting not.

Wow.

[rizzo320]

All you can say is wow. This is the power play that everyone was expecting. For several years, SoundExchange was all about "collecting for the artists", so that they get their "fair share". Now that new regulations have been set, the true colors are coming out. As usual, they are in it for themselves- it just took a few years of trickery and disguise. Most of us could see through it, but heck, they tricked enough people to get the current set of legistlation and royalty rates approved.

The RIAA is alienating listeners, and now alienating artists. These policies will only cause artists and music lovers to seek alternatives- even more so than before. Eventually, SoundExchange will be collecting nothing, because they'll alienate themselves out of business.

It's not about the artists. It's not about the music. It's all about control. That's all it will ever be to the RIAA/SoundExchange.

RIAA... great business, or greatest business?

[AbsoluteXyro]

You have to hand it to the RIAA. That is a brilliant business model. By claiming these royalties and "holding on to them" until the artist pays a fee to receive what is rightfully theirs, the RIAA is essentially getting an interest free loan from every artist that gets net radio play. ON TOP OF THAT, the artists have to PAY the RIAA in order to be compensated for the loan (on which the artists collect no interest)! That my friends, is the best money making scheme I have ever seen. Ever. Just beautiful. From a businessman's point of view, it brings a tear to my eye.

Re:RIAA... great business, or greatest business?

[Froggy]

You have to hand it to the RIAA.

That is their business model.

There must be some antitrust issues here...

[YouHaveSnail]

Even if SoundExchange can somehow make its claim to be able to collect royalties for nonmember artists stick (seems pretty dubious), one would think that they'd run into some serious antitrust issues if they then try to use that power to compel nonmember artists to become members. Essentially, they're claiming a monopoly on royalty collections, and then using that monopoly to reinforce their position. You're not supposed to do that...

Re:There must be some antitrust issues here...

[Teancum]

The only problem with the monopoly aspect of their business is that they are a government sanctioned monopoly, just like Major League Baseball or Amtrack. If you tried to set up an interstate passenger rail service without the express permission of Amtrack, just for an example, you will find out in a real hurry who has been granted the monopoly and you won't find a judge to overturn this law either.

And the same goes here for the RIAA and "SoundExchange". They are a government granted monopoly. The real trick here is to make the charge of being a "monopoly" stick in the mainstream public media and to demonstrate why this monopoly is such a bad deal, or even how the RIAA is gradually killing off the American music industry. Or how it is already dead. Most average people don't understand this concept, even thought it is obvious by now that the only realistic way for a young singer to break into the top tier of recording artists is through gimicks like "American Idol". If the RIAA didn't have such a stranglehold on the American music industry, you would find this TV show to be a total flop, as much better performers would already be performing the top songs. IMHO, "American Idol" is a symptom of how bad the music industry has become, and not a genuine showcase of talent.

Mind you, I like some of the performers that have come through that contest (Ruben Stoddard is one of my favorites), but it is unfortunate that this was the only avenue he had to be noticed. The days of the "garage band" being able to make it to the big leagues through hard work and determination are long over, except for those who have some exceptional luck. People with genuine talent are being ignored and not allowed to propser.

Re:Surely this must be a joke...

[Teancum]

I've long considered starting an internet radio station of only CC-by-* licensed music (and other copyleft licenses) for the express purpose of "sticking it to the RIAA". I've known about musicians who release their music under these type of licenses, and I think it is time to really stand up and take notice about stuff like this.

One bizzare issue that I don't know how it would play here is if some artist released some content under one of these copyleft licenses and then subsequently signed with the RIAA, would I still have to pay a royalty? Some licenses such as the GPL/GFDL explicitly prohibit such a 3rd party revokation of licensing, after the content has been granted, but I think this may be one of the weaknesses of the Creative Commons license suite.

This certainly would be a strong test case to really test copyleft principles, unless the RIAA can show that they hold a patent on the concept of internet radio (which I don't think they do... and that also opens yet another can of worms in terms of "IP rights").

Out of principle I would hope the EFF would themselves host such an internet radio station, begging the RIAA to sue the pants off of them. And do that in a public manner. I would donate money to their legal defense fund (and to help pay for the internet radio station too!) if they would decide to go this route. It would be the ultimate in 'net civil disobedience.

Or the FSF doing the same thing but with GPL'd/GFDL'd music. It almost sounds like something Stallman would love to do for the hell of it.

Now they have done it

[zappepcs]

The RIAA is trying to push around the only people that can really push back at them... artists!

What I mean is this, if the RIAA continues to piss people off, record companies will not get contracts, the RIAA member companies will then not support the RIAA, the recording industry as we know it crumbles...

How is that possible. Someone some where will start their own record company, providing on the parts that the artists need help with. That somebody can arbitrate royalties with public broadcasters in direct competition with the RIAA. The RIAA is not a government mandated body. They CAN be replaced. It will start with one or two bands, then more, then one or two record companies, then more...

What we need to do is start writing letters and emails to bands themselves. Explain that they will not get more money from you if they continue to work with companies that support or belong to the RIAA. Choke off the money stream and the RIAA dies.

Let 'em bloody well try

[mccalli]

I write music. It's not especially amazing stuff, but it's written and some of it is recorded and put out for free. If a net radio station fancies playing a track, then that's fine by me (though I refuse responsibility for their sudden drop in listenership...).

If this completely alien organisation tries making one unit of whatever currency they're charging in, I will go beserk. This is my music, nothing to do with them, and with no contract in place between us I shall offer it as I damned well choose. They have no right to claim ownership of any revenue whatsoever arising from this music.

Cheers,
Ian

Re:Surely this must be a joke...

[pembo13]

When people stop throwing in red hearings into important discussions

Re:Surely this must be a joke...

[urulokion]

The article is wrong in one way and it's reaching a wrong conclusion because of it. The law's creates a statutory license for webcasters to use if they don't want to negiotate with each individual copyright holder. The lincense is compulsory for the copyright holders, and SoundExchange is the body that is tasked to collect and distribute the royalties collected under the statutory license.

However if a webcaster choses to negotiate with a music copyright holder, and they come to terms, it's a non-statutroy license. SoundExchange can't get involved music under those type of licenses. The terms can be whatever both sided agree to. You can even ignore those silly restrictions on information display, interactivity with listners, time restrictions, etc.

What the article says thats wrong is that copyright holder can give their music away for free, and can't allow webcasters to use it for free. That's flat out wrong. SoundExchange can't stop that or even try to collect royalties for it. That would be interfence with the copyright holder's rights. I've love to see SoundExchance attempt to take that to court. Can you say "Crash and Burn!"

In regards to GPL'd/GFDL'd/CCL'd music, those are non-statutory licenses. The terms are already laid out. No need to negotiate. As longer as your agree to and follow the terms of the license, your use the music. And you can tell SoundExchance to go F... themselves.

not a joke

[Anonymous Coward]

The fact that your taste is dictated by big entertainment doesn't mean that other music doesn't have value. For example, Blues, Rock'n'Roll, Hip Hop, Ska all existed independently of commercial distribution- they were discovered, not created, by the big labels. The publishing landscape has changed in the last ten years---now a savvy musician CAN cut out the middleman, and I know several who have.

When I was a kid, you could disparage self-publishing as 'vanity publishing'. I don't think that's the case anymore. If you really care about music, you'll take a risk and listen without considering who funded the marketing effort.

As a broadcaster

[rantingkitten]

I run a synthpop and darkwave radio station myself (plug!), and I have had people tell me they've never heard this or that artist before, and then go check out their albums. One even went to the VNV Nation concert here in Atlanta after hearing them on my station. What's that mean for VNV Nation? Money in their pockets. And that's just the ticket sale; who knows what merchandise the guy bought while there.

I've also had artists send me promo tracks, full albums, and other stuff -- mostly indie artists looking for some exposure. If they're good (and they usually are) I put them in rotation, so dozens of people get to hear someone they've never heard. I don't solicit; they send me this stuff because they want me to play it. As one recent artist, James Stark, told me, after he sent me some tracks for consideration and I enjoyed them enough to put them in rotation:

Thanks I appreciate the exposure, it's hard to get the music out as an
independent artist which is why I'm trying to get radioplay. The CD is
the mail.

Just a guy trying to get his music noticed. And he's not alone -- this happens quite a bit, and I broadcast a niche genre. I bet broadcasters in more "mainstream" genres get even more artists than I do.

The artists love it -- they get free exposure to an audience primed to the genre, and whatever album sales, merchandise, mp3 downloads, and the rest that comes with it. The listeners love it. No one is losing and everyone is gaining -- except the labels and the RIAA who, in this day and age, are totally unnecessary anyway.

Some of the artists that send me stuff are easily good enough to get signed, and I know some have been approached, but they steadfastly refuse. They'd rather remain independant of money-grubbing middlemen and idiotic contracts, and get their music to the fans with channels of distribution their target audience is likely to use.

I started this venture after years and years of listening to net radio on live365 and other assorted places. And I bought music after listening. I know the system works.

Frankly, there ain't no Benjamens in the net radio trade. We broadcasters do this for the love of the music and because it's fun. Don't penalize us for bringing the art to the people. Don't penalize us, the artists, or the audience.

Re:when I was a young boy

[pipingguy]

This must have been from back when the RIAA had actual engineers working for them rather than just MBAs and predatory lawyer-types.

Re:They're #2. Maybe #1.5

[Lorkki]

Really? I could do better -- how about killing people and taking their stuff?

High risk, no guarantee of a long-term income. Real first-rate scum knows to squeeze people little by little.

Re:Surely this must be a joke...

[Teancum]

In regards to GPL'd/GFDL'd/CCL'd music, those are non-statutory licenses. The terms are already laid out. No need to negotiate. As longer as your agree to and follow the terms of the license, your use the music. And you can tell SoundExchance to go F... themselves.

That is the beauty of taking this approach to the issue and boldly advertising that "internet radio" stations using this approach to music distribution. I'm talking about being blunt and obvious that this is something that the RIAA can't possible touch.

The problem here is that I don't see the RIAA/ASCAP/SoundExchange interpreting this in the way you are talking about. Sure, you or I would agree that the rights have already been negotiated here, but SoundExchange is claming rights to license all music which is distributed via "internet radio" channels. And backed up by the Library of Congress. The point of the original article posting here is that non-RIAA members (which can include musical artists who have released their music under the Creative Commons licenses) are being forced by statutory authority to have royalties paid to SoundExchange, regardless of the terms, conditions, or licenses that were granted by the artists in the first place. They are using this as a way to force smaller recording artists or even groups that want to create an alternative scheme to the RIAA methodology to having to stick with this one approach and only use the SoundExchange system.

The point of using copyleft approaches here is that it would force the issue out of a copyright violation issue into the patently obvious RIAA taxation authority by a for profit group of corporations. If music which is simply placed into the public domain can be "taxed" in this manner, why not GPL'd music? Of course this isn't the only bizzare tax on public goods that goes to supporting for-profit corporations, but this would force such an issue into the realm of public debate for exactly what it really is.

This is also why this move by the RIAA is so awful and needs to be challenged as forcefully as possible, or at the very least legitimate alternatives need to be publicized in such a way that this monopoly can be broken. I think it would be through copyleft content distribution that you can make this stick.

Outright theft

[sjames]

Their claim is nothing short of outright theft. They might as well declare themselves to be the agents for your gas and electric service and insist you write the checks to them. I'll bet that would last about two seconds before they got sued and criminally charged in every state.

If I create some sort of internet radio content, and I want to make private arrangements with one or several netcasters to stream that content (perhaps for free), that's none of the RIAA's business. If I want to be paid, who is RIAA to interfere with my right to enter into agreement with a 3rd party of my choice to collect fees for me?

How is RIAA collecting (extorting) money for playing MY content any different than me downloading a bunch of their songs, pressing CDs and selling them on the street corner? Naturally, if they want to join my club, I'll forward their share to them after I deduct reasonable expenses ( new Ferrari, yacht, etc), handling fees (30%), slotting fees (30%), modest salary for myself (1,000,000/year), and of course, a promotion fee (30%). By clicking "I agree" on absolutely any eula ever, the RIAA has already agreed that any civil or criminal issues surrounding this agreement will be handled by arbitration (naturally, I'll be the arbitrator).

Remember, when a corporation speaks of the importance of obeying the law, about 90% of the time there is an implied "when it's in our favor only". Like any thief, the RIAA wants immediate legal action when someone steals from them while believing at the same time that when they steal it's a natural right.

While I'm at it, I think I'll represent that guy who patented the wheel too. Those CDs and records look awefully wheel like. $1 each (retroactively) should about cover it. The wheel patent guy can call me for his 10% cut.

Re:Outright theft

[cpt kangarooski]

If I create some sort of internet radio content, and I want to make private arrangements with one or several netcasters to stream that content (perhaps for free), that's none of the RIAA's business.

You can still do that. They didn't say you couldn't. They said that Internet radio stations are entitled to use the statutory license rather than negotiate with copyright holders, for everything. And that whenever someone uses the statutory license, the money is handled by SoundExchange, regardless of whether the copyright holder is signed up with them or not, because that's what the law mandates. No one has said that there can't be other licenses. Though signing up with SoundExchange does seem to preclude further collective licensing, though not non-collective licensing.

Honestly, this is all not a big deal. There are plenty of more important things to get worked up about, and I'd like to know how you would expect collective licensing to work, if not basically along these lines.

RTFA

[GodInHell]

"The recent U.S. Copyright Office ruling regarding webcasting designated SoundExchange to collect and distribute to all nonmembers as well as its members. The Librarian of Congress issued his decision with rates and terms to govern the compulsory license for webcasters (Internet-only radio) and simulcastors (retransmissions)." (http://soundexchange.com/faq.html#b4) 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.

-GiH

Re:In the US at least, you can sue the government

[cpt kangarooski]

I haven't looked at it in legalistic detail

I believe that.

I write a couple hundred songs.
I run a web radio site and broadcast these.
The U.S. Copyright Office authorizes SoundExchange to collect royalties on my "use" of these songs.
I therefore owe SoundExchange royalties for the "compulsory license" to broadcast.

No. The law does not require a copyright holder to pay royalties that are ultimately due to himself. It's not a statutory license to broadcast music over Internet radio at all, it's a statutory license to broadcast music over Internet radio where you otherwise don't have a right to do so (i.e. you're not the copyright holder and you don't have a separately-negotiated license with the copyright holder, and there is a copyright)

As the holder of copyright in these works, *I am the one who authorizes their licensing, and if another party does so they are breaking the law.

Except when the law itself includes a license (as is the case here) which you don't get a choice in. You can always offer a different license, but anyone can opt to take the one Congress created. This is because Congress defines what copyright is in the US, and they've defined it to include this license.

That was very unclear

[jc42]

There is a license which artists must grant under law, a compulsory license, ... As with the GPL, anyone may accept. Anyone may decline. If you decline, you have no rights to perform the song ...

This makes no sense to me at all. First you say that I must grant this compulsory license. Then you turn around and say I may decline the license. I can't find a way to read this that isn't self-contradictory. Do I have to grant the license, or can I decline (to grant) it?

And if I decide to decline it, what's the mechanism? Presumably I must do something that will notify all possible broadcasters and other "performers" (DJs?) that my recording can't be "performed". But I don't know any practical way to do such a thing. There's not even any way that I know to discover even a small percent of the people who might want to use my recording.

It's all totally unclear and contradictory ...