U.S. Court Denies Webcasters' Stay Petition

Michael Manoochehri writes "Reuters reports that a "federal appeals court has denied a petition by U.S. Internet radio stations seeking to delay a royalty rate hike due July 15 they say could kill the fledgling industry." This royalty rate hike, put forth by the US Copyright Royalty Board, will increase royalty rates for webcast music tremendously, in some cases to more per year than many webcasters bring in from revenue. Save Net Radio, a coalition of webcasters, is telling listeners that "We are appealing to the millions of Internet radio listeners out there, the webcasters they support and the artists and labels we treasure to rise up and make your voices heard again before this vibrant medium is silenced.""

Comments

What, you're shocked?

[ArchieBunker]

Whoever has deeper pockets wins.

Re:What, you're shocked?

[popo]

"Whoever has deeper pockets wins."
--------

Not true. (Let's call your argument the "neo con" argument.)

The people who actually win are the people who can't be controlled.

(We'll call that the "Iraqi" argument.)

Internet Radio will morph into P2P streaming and offshore stations. It's not going anywhere.

The only thing that's going away is the last hopes the record labels had to profit from it.

Foot, meet bullet. Information wants to be free.

Re:What, you're shocked?

[Anonymous Coward]

Information wants to be free. That may be true, but entertaiment wants to be paid and you just want to be cheap.

Re:What, you're shocked?

[rubberglove]

Who doesn't want to pay royalties?
As I understand it, the internet broadcasters just want the same deal that, say, satellite radio is getting.

Oh well. I'm sure (or at least I hope) that SOCAN will welcome them welcome them with open arms to Canada, where they can pay a percentage of revenue and not a per-song, per-listener rate.

...not to mention that this is a retroactive rate hike! Who ever even heard of such a thing?

Re:What, you're shocked?

[Mattintosh]

It sounds to me like everyone on /. needs to buy one share of each major record label, then attend the shareholder meetings and stage an uprising.

"You're not furthering profit! We demand you make more profit! You keep chasing so-called pirates, wasting money, annoying paying customers, and you don't add anything of value that might increase profit! WE DEMAND HEADS! ON PLATTERS!"

This would get their attention and quite probably darken the pants of all of their board members. Because if you think about it, we might each have a tiny stake in the company, but that many voices would certainly sway the major stakeholders against the board of directors and cause change.

If you can't beat 'em, buy 'em then beat 'em.

"Taps" anyone?

[Telepathetic Man]

Does Taps require any kind of royalty fee to be payed? Perhaps web radio stations should play it all day, every day, until their final day.

Killing the goose that lays the golden egg.

[Agent Green]

I don't think congress is going to fix this tomorrow ... so the RIAA should get what they deserve and lose all their royalties altogether.

Fuck 'em. I expect everyone has had enough of their shit.

It's just too bad that all the honest people in this new business are going to have to suffer for it.

Re:Killing the goose that lays the golden egg.

[Anonymous Coward]

I think this is a good thing. Please bear with me....

Look, the goose is already cooked. Let's face it, the MAFIAA have all but completely destroyed the recording industry. I remember saying
in a post on this site maybe 7 or 8 years ago that they would ultimately destroy the industry rather than give up control.
Putting all the internet radio stations out of business is a scorched earth move, merely a spiteful parting gesture from a walking corpse.

Let them do it.

Let them use their sweaty, mean spirited little pencil pushing lawyers to take their ball and go home.

Nothing short of this will precipitate the revolution that is needed in the media, and it starts with the smallest independent
broadcasters.

You think these businesses will roll over and disappear without a fight? No way, they will merely adapt to circumstance.
The MAFIAA work by creating a false scarcity of content. In reality there is a glut of high quality Free content out there, millions
of musicians and podcasters who have had a decade to become highly skilled content producers are just waiting for the death of Big Media so that their work can become valuable. The myth of "artists need to be paid" has been so completely destroyed only fools cling to it. Everybody knows (to quote Mr Cohen) how crooked the game is, that artists never get paid properly anyway, and that all the ones who have any merit produce because they
want to and would do so even without an audience. Once the MAFIAA skulk off home to mommy taking their hyped manufactured rubbish with them there's gonna be an explosion of new talent, new voices, fresh political commentators and documentary, new celebrity.... It's ripe to happen, simple supply and demand. There is a vast reservoir of supply, and now the demand is about to kick in. I hope to God they pass this law, because it will be the death of the bastards. Once mainstream radio and TV get a sniff of how internet stations are surviving by bypassing corporate controlled material they will want a piece too. And thus the whole filthy mess begins to unwind....

Re:Killing the goose that lays the golden egg.

[onion_joe]

I get an inappropriate sense of glee when I tell clients that they can't do this or that or they have to spend x^2 dollars to make something obvious happen because of DRM issues.

eg.: Windows Media Center will not stream from a server to a client laptop. You can buy an xbox and a "media extender" but that removes any mobile functionality (unless you want to lug a DC->AC inverter and battery pack with you, or appropriate DC mobile power supply.)

So what am I doing now? Setting up a test box with MythTV.

I think the inappropriate feelings stem from watching non-standard and poorly implemented DRM wreaking havoc on MS/RIAA/MPAA customer loyalty.

A previous post mentioned, "shooting oneself in the foot." Fine by me. I sell OSS every chance I get. It's only us hard-core gamers that need MS [for the time being.]

-OJ

Re:Killing the goose that lays the golden egg.

[Daengbo]

I don't play anymore, but I used to and I still know guys in their 40's playing, so I'll chime in. Yes. Most musicians don't play so they'll get "discovered" and rich. They love to play. They make CDs to sell at their gigs. They play their gigs for money, but not much, so they almost all work full-time jobs and get off work on Friday only to grab all their gear and run to the bar. They practice incessantly because they love it. They are artists in the true sense, who just want to play. Playing for people is good, but just getting some guys together and playing can be almost as good. Having people enjoy their art makes them happy, and they don't often think about "making it big." They enjoy what they do. They would (and sometimes do) do it for free.

Re:Killing the goose that lays the golden egg.

[quag7]

Yeah well, every third person I meet claims that they're a "musician." So some slackers might have to get actual jobs and actually work for a living. I do not care. I look forward to the day Avril Lavigne takes my order for a cheeseburger. Musicians and artists tend to have an extremely high self-opinion in terms of what they think they contribute to "culture." John Coltrane contributed to culture. The world would not be significantly different, however, if the last ten years in top 40 music had never happened.

Where's the rock style life for the people who build bridges and clean up bathrooms? Where's the rock star life for teachers who contribute something directly measurable to our civilization? Where's the free booze and blowjobs for activists, community organizers, and people manning the soup kitchens tonight?

And for that matter, where's the rock star life for the countless musicians in less lucrative genres like jazz or folk music? Some of the most mindblowing music I've ever heard was hardcore jazz played furiously with wild abandon on snowy nights in hole-in-the-wall bars in towns and cities you haven't heard of by amateurs who had no chance in hell of ever making a living at it even in an ideal intellectual property/copyright environment.

What this all may portend is the end of the corporate-generated rock star and frankly, I couldn't welcome it more.

I have no solution to the problem of stolen demos and studio tapes; that's just wrong. But if that problem can somehow be addressed - possibly by home studios - artists should record albums and then set a bounty and collect money for it online, bypassing record labels completely. When the predetermined threshold is reached, the album gets released on the internet, with the expectation that from then on it becomes a promotional tool for the next album or tour, because there is simply no way you can stop music piracy. The question of "what to do about piracy" is moot. You set a bounty - say, a million dollars. When enough contributions come in to total a million dollars, the album is published on the web, free for anyone to download. In theory, all of the money would go to the artists, minus IT/financial fees.

This plan is interesting to me because what it means is, Bob Dylan fans (for example) pay money to the bounty fund for Bob's next album. When that album is released, it is then, for all practical purposes, free. This allows fans and advocates to contribute money to what they like, and it acts as a sort of gift to the rest of the world to spread the music they like. Beyond this, the suits are cut out of the equation, as they should be, because with the internet, all of the supposed value they add (promotion and distribution) has diminished significantly. If music were free, it would be promoted by blogs and file sharing services.

But then music would have to rely on its own merit, rather than street teams and tastemakers telling the dumbest of us what we like.

By setting a bounty, we ensure the artist gets paid. 50 years from now, there is no question whether a music file being passed around on the internet from today was "stolen." Its very existence would indicate that a bounty was met.

For visual entertainment that is not exhibited in theaters (which is an experience that piracy cannot easily duplicate), a similar model could be used.

I'm sure this scheme has problems but the old way of doing things, where you go to the store and you buy something but don't own it - itself a weird concept, really - is simply irrelevant now. The question is not what to do about piracy; the question is how to incorporate the reality of the free flow of data in a global, electronically connected world, with the need to make a living.

The old saw about how the internet interprets censorship as damage and routes around it applies and can be extended here:

The internet interprets copyrights and patents as damage, and routes around it.

The world has changed. Whether this ticks people off or not is increasingly irrelevant, and no - I don't have to be a professional musician myself to make this statement. You don't need a weatherman to know which way the wind blows.

Re:Killing the goose that lays the golden egg.

[meatspray]

The oddity about the music industry, is that the period when the copy write would make the artist the most money, almost always coincides with the artist collecting the least capital from the signing label. It's not just that we're cheap, there's a great devide between the haves and the have nots, and they're screwing up a good thing so they can keep that divide as wide and unfair as possible.

http://en.wikipedia.org/wiki/Internet_radio#2007_C opyright_Royalty_Changes


According to a report released in March 2007, under the newly proposed rates, annual fees for all station owners are projected to reach $2.3 billion by 2008. This figure is more than four times that for terrestrial radio broadcasters who, due to terms set forth in the 1998 Digital Millennium Copyright Act, are exempt from the additional royalties imposed on digital broadcasting outlets, which compensate the performers of recorded works. .


Watts are far cheaper than Megabytes, radio stations currently run over 20 minutes of ads per hour to stay profitable. The RIAA is peeing in their own pool. sooner or later, everone's gonna get out, it's not going to be pretty.

http://www.riaa.com/aboutus.php?content_selector=a boutus_members

What really needs to happen is for everone to recognise who is an RIAA member and chastise them for it. The RIAA does everthing without recourse under a percieved cloak of anonymity. If people realized that Garth Brooks Record label is suing 12 yr olds and 80 year olds without computers with no remorse, they might have a different perspective on it.

But what can I do?

[RyoShin]

I subscribe to Pandora, which has really helped me find new bands and music, and they send out a message every so often about this, asking for our help. They give phone numbers for local congressmen, as well as some places to find half-canned scripts to mail in. I would like to see Pandora stick around, even if it meant I did a paid subscription (which I am willing to do, if they can move it into its own client), but I really can't see any action I could take affecting it.

This kind of issue seems too "localized" and small scale for any Congressman to give a shit about, not that know what the hell is going on in the first place. I could call or mail, only to have some intern glance over or listen to what I said, and in return give me the closest canned script that works for this situation. Then of course are those Congressman who are being paid off, and would turn a cold shoulder to it, anyway.

If I believed in market forces more, I would say that this is something that the market would take care of; sadly, the greed and conspiring of large companies coupled with the stupidity of most consumers guarantees that this would stay in effect for quite a long time without a high-level intervention. So what, exactly, could I do without a complete hopeless feeling? I'm sure common answers would be to donate to the EFF, UCLA, or some other activist group, which is not a bad idea at all, but I lack funds.

More aside from the point, even more sad is that it seems that I would have about the same effect on any issue with a congressman, from internet radio fees to the use of taxpayer money in regards to education. Perhaps it's a current bout of depression talking, but I can feel nothing but a sense of hopelessness for this country in the future, looking at the way things are turning now.

Vote them out

[willow]

I've let both my Senate and House reps know that 1) I vote, contribute $$$, and 2) This issue is important to me and 3) I have influence on my voting friends on technical issues and 4) I will be very unhappy if they fail to represent my interests. Yes, this includes paper, online petitions, email, and phone calls.

While no single issue would cause me to actively campaign against an incumbent I like, I still want them to know that I'm watching what they do and will actively work against them if they don't consistently stand up for my interests. It's too bad we can't force a re-election on newly elected reps that don't deliver.

Corporations can't vote. Remind your reps of this.

Sound exchange says they won't enforce it

[Asmor]

http://blog.wired.com/music/2007/07/breaking-news- o.html

Just saw this posted on Fark. Sound Exchange, who I'm assuming are the people set to collect all the royalties, vowed in front of Congress not to enforce this against internet radio until new rates are worked out.

Re:Sound exchange says they won't enforce it

[rizzo320]

By the way, here was what was sent out to NPR/CPB funded stations:

Dear Colleagues,

As you know, the music that public radio stations use on air and over the Internet typically requires licenses from the different copyright owners and payments of copyright fees.

Record labels are represented by the RIAA (The Recording Industry Association of America). RIAA in turn uses the non-profit SoundExchange to negotiate streaming rights with webcasters (including public radio stations). If parties are unable to reach an agreement through negotiation, an independent administrative tribunal called the Copyright Royalty Board ("CRB") has the power to mandate a rate that covers Internet streaming. As we advised you last year, the agreement that we had to cover public radio's web streaming expired at the end of 2004.

Since then, CPB and NPR have been in negotiations with SoundExchange for a license to stream. When we were unable to reach an agreement, the issue of our license fee was referred to the CRB. The CRB issued a decision that set a rate structure that we believe was very unfavorable to public radio and failed to account for the noncommercial, public service nature of our music streaming. We have appealed the CRB decision to the U. S. Court of Appeals for the District of Columbia. The appellate review will take a considerable amount of time, probably a year and half, perhaps more.

The CRB decision included a requirement that back fees be paid by July 15, 2007. We made a motion for a stay in the royalties fees but yesterday the U.S. Court of Appeals denied that motion. While we were disappointed in that decision, we were not surprised. There was a slim chance the stay would be approved but it was worth venturing.

Meanwhile, NPR and CPB continue to negotiate with SoundExchange in the hope of achieving a system-wide settlement that recognizes the special noncommercial, public service nature of public broadcasting. Thus far we have been unable to reach an agreement. Our next discussion is scheduled for this Friday.

Because of conflicting provisions in various statutes and regulations, there is some confusion about what payment is actually due on July 15th. CPB and NPR believe that only base fees for 2007 are required to be paid on July 15th. We believe that fees for 2005 and 2006 are not payable while our appeal is pending. To comply with this requirement, CPB will offer the Sound Exchange a payment tomorrow that we believe covers the base fees of public radio that are due for 2007. You should seek your own outside counsel if you have concerns about what fees are due on July 15th.

We believe that our payment to satisfy the July 15th obligation will signal to the SoundExchange our good faith and encourage them to consider compromises on the issues that separate us. However, it is possible that Sound Exchange disagrees with our view of what is owed on July 15th and seek payment for fees from 2006 and 2007. In addition, SoundExchange may also pursue additional fees from the few stations that we believe exceed the usage cap included in the base fee. As we have indicated previously, these fees are station obligations that CPB covered through the end of our previous agreement. CPB cannot yet guarantee payment of additional fees given that the size of these fees is yet unknown. If you have concerns about any of this, you should consult outside counsel or, if you are an NPR member, NPR for assistance. Please note that CPB cannot provide legal advice to other parties, including stations.

Thank you for your patience as we work through this complex and difficult situation. We will keep you informed to the extent that confidential negotiations permit. In the meantime, realizing that each station must reach its own conclusions, we believe that it is critical that the public radio system stand together at this time. NPR recommends that stations not enter into individual agreements with SoundExchange

Re:What about regular radio?

[Paradise Pete]

The whining, though old, never ceases to amaze and amuse me. Who gives a shit about the RIAA or what they do.

I take it then that you clicked on this story by mistake, and then in your haste to close it you bumped the keyboard and accidentally posted instead.

ISPs traffic shaping will kill streaming media

[grolschie]

As for the first, I don't think P2P was made for the kind of streaming that stations do.

Why is that? P2P TV such as Sopcast works just fine of video feeds....if you have a good connection.

Although, I reckon if anything kills internet TV and radio, it will be ISP's (poorly implemented) traffic shaping systems. Ever since my ISP increased the bandwidth to 3mbit/s, but introduced traffic shaping, the performance of even low bitrate streaming media has turned to crap. It's because every packet gets inspected (apparently) which causes all kinds of lag. Speed tests show I'm getting the full download speed at most times.

That is the funny part

[WindBourne]

Politicians have NOT killed the golden goose. They have made it safe for large business and only for them. Look, the last time this came up, I suggested that these stations play groups that are not associated with the RIAA. Apparently, the RIAA gets to collect it wether the group is signed up or not. Amazingly, the group gets to KEEP that money until the music group signs up with them. And they do not have to pay interest. That means that congress has given RIAA a monopoly. In addition, they have eliminated the competition for the broadcasters, by pricing it too much for the little guy to pay. But where are you going to go? Streams from another nation? W. is running around trying to kill them all off.

The only way that I can see this happening is if the muscian's OWN the stream site that plays them. Imagine a site that is devoted to the 90's, might get 10 groups (from the 90's) to BUY into them. 1 share each. They pay the musicians the old rate. As time progresses, they would get more groups to buy into them. I think that it is possible that the company could even allow other groups to own them or perhaps buy into them. Just 1 share. I think that is all it would take. Any lawyers out there? Tear this apart.

Re:What, you're overseas?

[PMBjornerud]

As for the first, I don't think P2P was made for the kind of streaming that stations do. However, it would be extremely useful to have a local "cache" of the last 50 songs played on radio. Really liked that previous song? Just drag it into your portable music player and go. That tune they played 30 minutes ago stuck in your mind? Just click and play it again.

Such a cache would obviously be illegal. But convenient for the users, and it would mean that most listeners on any channel/playlist/tag would have a large selection of the typical songs. There is some synergy, so I would not discard the possibility of someone coming up with a clever protocol for doing something like this.

Hm... Such a program would actually download and share music without you telling it which songs to download. Nasty.

Copyright is expired on that one

[Solandri]

Taps was composed by Daniel Butterfield in 1862 during the U.S. Civil War. He died in 1901, so under current copyright law it would've entered the public domain in 1971. If it was considered a work for hire, the copyright would've been valid for 120 years, which would mean it entered public domain in 1982. (This is just worst-case. It probably entered public domain before then.)

Either way, it's way too effing long, that something created around the time my great-great-grandparents were born should only come into the public domain during my lifetime.

Re:Copyright is expired on that one

[ArsenneLupin]

well, some algorithms (particularly brilliant million-man-hours type ones) should be patentable. otherwise they remain trade secrets and will likely lost permanently at some point. isn't this discussion the original reason for patents and copyrights? Correct. But in that case, the patent holder should be required to uphold his end of the bargain, and publish full source of the program. Hardware patents usually come with full schematics, and precise instructions which can be used by anybody "skilled in the art" to build the device. Not so with software patents.

This is one small detail which the pro-softpat lobby often forgets. They want their cake (monopoly protection) and eat it too (still keep it secret)!

That can't be in the interest of the common good.

The RIAA dosen't care about the money.

[furbearntrout]

It's all about control.
The major record label's business models are all based on controlling the bottleneck -- when record-making equipment was expensive, they used that; now, they control the promotion.

"They are the gatekeepers--they are guarding all the exits; they are holding all the keys. Sooner or later; someone is going to have to fight them.
Now, I won't lie to you -- everone who has fought them, everyone who has stood his ground has failed. But where they have failed, you will succeed".

"Because i'm the one?"

"Because you're The One."

The internet; in this case, internet radio, represents a promotional channel outside their control. Especially the smaller stations, how can they get them under a "paid promotion" contract? All of them? Hence the minumum fees of 500$

Re:The RIAA dosen't care about the money.

[wytcld]

when record-making equipment was expensive, they used that

Not the case. Back in the early days record-making equipment was quite cheap. There were myriad small, local labels across the country, tied to local music scenes. This continued through the mid-50s, when the business started to consolidate due to better national promotion and distribution of former local stars like Elvis Presley, including payola to the formerly-locally-oriented radio stations to induce them to favor the nationally-marketed stars. Radio in the early era had been based largely on live broadcasts, since the fidelity was better (and live music has other virtues), out of the major cities and big regional stations (shows like the King Biscuit Flour Hour down in the Delta).

As recording studio technology developed from the late 50s onward, studio time became expensive, leading to the current system where artists get signed to labels which then lend them money for their time in the studio to record. It usually turns out that the seemingly generous offers get totally absorbed by studio costs, and the musicians get nothing. That's not too different from back in the early days, when musicians got a small fee per song recorded, and nothing at all no matter how many records sold. Musicians made most all their money from live performance - just like today.

What the record industry is trying to control here is the ability of small, independent musicians to gain any audience at all - the kind of musicians the commercial radio stations and even satellite radio will never play. They're trying to assure that real art doesn't distract from their marketing of sex and violence dressed up as music. Any politician concerned with the state of our mass culture should recognize that the degeneracy is largely a corporate product. So anything that decreases the power of these corporations by allowing more real art to flourish in spaces they can't control is key to restoring health to popular (and less-popular) culture.

Politicians - bewailing the media while furthering its monopoly. In terms of the longer-term success of our nation, this is worse than Iraq - indeed without this, Iraq could never have been sold.

Actually, terrestrial radio may be next...

[Abcd1234]

Actually, what's really interesting about this whole situation is that, from what I understand, they plan to go after terrestrial radio next. To quote:

Where webcasters and the recording industry do agree is on the unfairness of making tiny Web stations pay for performance rights while huge radio companies pay nothing. Congress decided that Web stations must pay royalties to the composers of each song and to the performers and record labels, even as traditional AM and FM broadcasters continue paying only the composers -- a quirk in the law that gives broadcast radio a huge advantage.

Simson agrees that "there's really no justification for broadcast radio not paying, and we're going to try to address that."

Yeah... they really are that crazy.

They're doing this to kill independent bands

[i_b_don]

So you have to ask the question "why?"

Soundexchange and the RIAA both know that this will kill off 99% of net radio, so why are they doing it? IMHO the reason is that they want to keep independent bands in check. if indies had a good place to be heard and become known without going through their slimy hands then that's scary thing for them. If you can limit the amount of stations that play music then you can limit everyone's choices to a few classically popular bands that are already signed to the big labels.

That's the same behavior you get from radio broadcasting now a days. Time is valuable and so you can only play the bands that are "popular". if you can't aim at a niche audience then you have to be broad and boring. I'm sure the through of democratizing our listening habits scares the crap out of the big labels. This is just a means of using ancient laws to prop up the current paradigm that much longer.

d

Re:Killing the opinion that lays the golden turd

[quag7]

Hah. As if downloading a bunch of shit from Pirate Bay makes it somehow culturally significant. Thousands of crappy McDonalds burgers are sold every day, but that doesn't make it *cuisine*.