Small Webcasters Offered a Rate Break, Reject It

Pontifex minimus writes "Music royalty collection group SoundExchange has offered an olive branch to small webcasters. They are willing to delay the exorbitant new rates set by the Copyright Royalty Board until 2010 for small webcasters in hopes that they can keep Congress from passing the Internet Radio Equality Act. Larger outfits, like Live365 and Pandora would not be affected and would have to pay the new rates. '"Although the rates revised by the CRB are fair and based on the value of music in the marketplace, there's a sense in the music community and in Congress that small webcasters need more time to develop their businesses," said John Simson, executive director of SoundExchange.' SaveNetRadio rejected SoundExchange's offer, saying that it 'throws large webcasters under the bus.'"

Comments

Re:can internet radio play free music?

[MP3Chuck]

I was going to write something up, but this comment on a previous discussion regarding SoundExchange seems accurate.

Re:someone explain something to me...

[cpt kangarooski]

There are two kinds of distinct creative work involved with music. The first is the music itself, i.e. the arrangement of notes and/or lyrics. The other is a sound recording of a particular performance of that music, e.g. a tape recording. Music has long been copyrightable, and usually this applied to the sheet music. A recording of a musician performing that music wasn't copyrightable in itself. Congress decided to grant copyrights for sound recordings in the 70's. However, they limited that copyright so that it didn't apply to the radio: a radio station was free to play a sound recording over the air, and pay royalties to the songwriter, but not to the performer. This is still the case, in fact. But much more recently, Congress decided to grant a copyright in the sound recording that applied to digital transmissions. This meant that now, unlike for terrestrial radio, things like Internet radio would have to pay a royalty not just to the songwriter, but also to the performer.

As is the case for music, the royalty is under a statutory license. That is, rather than have everyone suffer the huge headaches and transactional costs of negotiating rights for each piece of music individually, everyone can pay a fee set forth by law and get a license automatically, regardless even of whether the copyright holder agrees. (Because his copyright doesn't apply to people who pay the statutory license; that's how the law is written) Everyone is free to make their own arrangements, but in practice few bother to do so since it is really a huge pain in the ass.

The Copyright Office was empowered to perform certain administrative tasks related to this, and one thing that was done was to name designated agents to whom the statutory license royalty can be paid so that the payor will be in compliance with the law. Currently, the only one is SoundExchange.

If you have a separate agreement with the relevant copyright holders, you don't need to pay SoundExchange. If you are playing a recording to which you are the copyright holder, or a recording which is in the public domain, you don't need to pay SoundExchange.

Is the RIAA that powerful that they can manage to dictate legislation that way?

Yes. The industries involved in copyright matters have been dictating legislation from the beginning of the 20th century on. This is nothing new.

Worse than you imagine.

[twitter]

No free alternatives are allowed. It is obvious that people would flock away from these fees if they could, so they won't be given the chance. This will be enforced the same way the current ban on terrestrial broadcast is enforced. Because internet broadcasts are not carried over a limited publicly owned spectrum, there is no technical justification for this system, it's purely anti-competitive - designed to perpetuate the RIAA member companies into the future when they would naturally die off.